Powering a Greener Future

Corporate PPAs in 2023

2022 was a transformative year for Corporate PPAs, with 36.7 GW of clean power deals being contracted through Corporate Power Purchase Agreements (PPAs).1 With the highest number of deals emerging from the United States, Spain, India, Bangladesh and mainland China, these jurisdictions paved the way in embracing the corporate commitment to clean energy.2

An Overview: The Corporate PPA Landscape in 2022

This year witnessed an impressive surge in Corporate PPA deals, with more than 160 corporations, across 36 countries announcing Corporate PPA deals in 2022 – a growth of nearly 18% from 2021. Globally, 148GW of clean power deals have emerged through Corporate PPAs since 2008.3 This appetite for Corporate PPAs, evidenced by the past year, has continued to grow throughout 2022 and into 2023. As corporations look to take advantage of a range of sustainability, economic and reputational benefits, the rise of Corporate PPAs shows no sign of slowing down.

The European PPA Market in 2023

Venturing into 2023, Europe continued to show its unwavering commitment to a cleaner, greener future. In the first quarter, 47 PPA deals were signed in Europe, with a total capacity of 4.6 GW equating to 11.5 TWh/year.4 As at July 2023, over 135 PPA transactions had been recorded in the European market, and by October 2023, the market had secured 7.8 GW of renewable capacity under new PPAs. Based on these figures, we expect the total number of deals in 2023, to exceed the 193 transactions recorded in the previous year.5

Leading the Charge: How we can help your business

Having advised on some of the earliest Corporate PPAs in the Netherlands (2007) and the UK (2009), we have become an experienced advisor on these structures globally.

Our longstanding experience navigating the Corporate PPA landscape means that there's not much we haven't seen when it comes to advising on these evolving, and often complex structures. This report looks at the main drivers propelling the growth of Corporate PPAs globally. It addresses several innovative deal structures and provides an overview of market considerations in key jurisdictions across Western and Eastern Europe, the Nordics, Asia-Pac and the USA.

Understanding the Global Corporate PPA Market

What is a Corporate PPA?

A Corporate PPA allows corporate energy consumers to purchase power directly, and on a long-term basis, from renewable energy generators, even if they're not located nearby. They provide an alternative to the traditional model, where businesses purchase power from utilities that gather energy from multiple generators.

Corporate PPAs are long term agreements (typically between 10-20 years) that provide price certainty for both the corporate and the generator by using fixed or floor pricing structures. We elaborated on this in pages 10–11 of this report.

The Global Market: 2022/23 at a glance

Since 2022, we have seen continued, major growth in the Corporate PPA market.

In Europe, Corporate PPA activity has accelerated. In 2022 alone, the number of signed deals increased by 29%, as buyers across the region opt for longer-term power deals that protect them from the volatile wholesale electricity market.6 Moving forward, we expect to see an increase in short-term tripartite PPAs.7

In the first half of 2023, the market remained steady, with 15 solar power and six onshore wind power deals being signed in Europe, amassing a total capacity of 1,135 MW.8 During this period, power prices continued to fluctuate in Sweden, Italy, Spain and the United Kingdom whilst in Poland, France, Germany and the Netherlands there was an increase of up to 7.7%.9

Market Overview: EMEA

During 2022, deal activity in the Europe, Middle East and Africa (EMEA) region declined by 7%, compared to the region's activity in 2021.10 This can be attributed to the ongoing energy crisis, and continued uncertainty of supply of gas from Russia due to the Ukraine invasion.

However, as the European Commission proposes power market reforms and lower gas prices, it is expected that activity will continue to increase in Europe throughout 2023.

Market Overview: APAC and US

Clean power deals in the Asia Pacific have nearly doubled, while the US saw an 18% increase, hitting a record of 24.1 GW out of the global 36.7GW deals.11 This growth is largely due to the virtual PPA model which sells power straight to the market, helping buyers avoid fluctuating prices.12

Who are the key drivers of growth?

The main participants in these deals are tech companies and data centre owners. In 2022, Amazon led globally with 10.9 GW deals. Other tech giants leading the way in clean power purchases included Meta (2.6 GW), Google (1.6 GW), and Microsoft (1.3 GW). Large industrial companies, including oil & gas companies (e.g. Occidental Petroleum, Chevron and Energy Transition Partners) and chemical companies (e.g. Covestro and Borealis) also contributed significantly to the demand.

In Europe, by the end Q3 2023 companies in telecommunications, ICT and heavy industries had accounted for 60% of signed Corporate PPAs. The market saw continued diversification with other sectors such as transport, automotive and retail increasingly contributing to the growth of the PPA landscape and the decarbonisation of industry.13 Numerous sources are also advocating for the passing of the Renewable Energy Directive which contains advantageous stimulations for the PPA market and the European Commission's Electricity Market Design reform proposals, which help support the energy transition in the region.14

Paving the way towards Clean Energy: The RE100 Movement

The RE100 is a global corporate initiative uniting over 420 major businesses, all dedicated to achieving 100% renewable electricity. With an ever-growing membership, these companies are making significant strides in green energy consumption. So far, the RE100 have procured 440TWh of clean electricity and aspire to achieve carbon free grids by 2040.

EU Regulatory Update

The EU has made several initiatives promoting renewable energy and Corporate PPAs:

1. Renewable Energy Directive (RED II)

In December 2018, the EU adopted the recast Renewable Energy Directive (RED II), which set a goal for the EU to source 32% of its energy from renewables by 2030. It also provided a framework supporting the uptake of Corporate PPAs.

2. 'Fit for 55' Package

In July 2021, the EU Commission published the 'Fit for 55' package, proposing changes to RED II (called RED III). The aim of RED III was to reduce GHG emissions by 55% by 2030. The commission also increased the renewable energy target to 40% for 2030, and set up more support for Corporate PPAs. This included clearer reporting requirements, reducing regulatory barriers to PPAs, and offering financial safety nets such as credit guarantees.

3.REPowerEU Plan

In May 2022, in response to the Ukraine invasion, the European Commission launched the REPowerEU Plan. The main objective was to set out a roadmap for phasing out EU dependence on Russian fossil fuels. Once again, they, proposed a new renewable energy target of 45% by 2030.

EU's Renewable Energy Evolution: From RED II Directives to the 'Fit for 55' Ambitions

As of June 2021, all Member States successfully transposed the directive RED II, a directive that reduces regulatory and administrative barriers to Corporate PPAs to promote their adoption. This will be monitored through the integrated national energy and climate plans which Member States must submit in accordance with the directive.

In addition to this, RED II:

  1. requires Member States to recognise guarantees origin (GOs) issued by other Member States in accordance with RED II; and
  2. clarifies that Member States may allow the issue and transfer of GOs directly to corporate offtakers pursuant to a Corporate PPA from renewable generators that already receive financial support from a support scheme (e.g. feed in tariffs).

The latter point is important as it reverses a previous proposal by the European Commission. Previously the European Commission suggested that Member States must ensure that GOs from renewable generators, that already receive financial support from a support scheme, be auctioned centrally, rather than being transferred directly to offtakes under a Corporate PPA. This would have had a negative effect on Corporate PPAs, as GOs are vital for businesses to be prove they're using renewable power.

Even with this reversal, Member States still have the option to restrict the issue of GOs for subsidised renewable generators.

The success of Corporate PPAs largely depends on how each Member State adopts RED 11's requirements. The creation of an enabling framework to facilitate the transfer of GOs across borders and encourage the conclusion of Corporate PPAs will likely drive growth in this exciting market. The Fit for 55 package, officially adopted by the European Commission on 14 July 2021, concluded negotiations with a provisional agreement to agreement to raise the share of renewables to 42.5% by 2030.15

Furthermore, on 14 March 2023, the European Commission proposed reforms to the European Union's electricity market design to increase renewables, phase-out gas, decrease the impact of volatile fossil fuel prices on consumer bills and make the EU's energy industry cleaner and more competitive.16 The proposed reforms will introduce measures that incentivise long-term power production contracts in the Electricity Regulations, the Electricity Directive, and the REMIT Regulation.17

The Commission intends to facilitate the deployment of PPAs so that companies can secure a direct supply of energy and profit from stable prices. The reforms will also require Member States to ensure the availability of market-based guarantees, to reduce credit risk to buyers.18

Regulatory Issues: Financial Services

With synthetic Corporate PPAs, in parallel to the conventional contracts between the parties, the Generator and the Corporate will enter into a contract for difference or other financial derivative contract where they agree a fixed strike price for the renewable electricity provided by the Generator (Virtual PPA or VPPA). The Generator and the Corporate settle the difference between the fixed strike price and the variable market price at which the Generator sells the renewable electricity it produces to the utility supplier. This system acts as a financial safeguard for the Corporate against the fluctuating electricity prices in its standard electricity supply contract with the utility.

The Generator and the Corporate will each need to consider whether they are carrying out a regulated activity under financial services laws because a VPPA (as a contract for difference) may constitute a regulated financial instrument. In addition to authorisation requirements, the Generator and the Corporate will also need to consider reporting requirements under MiFID II and obligations under European Market Infrastructure Regulation (EMIR) which may include reporting, margin, risk mitigation and recordkeeping obligations. Legal advice needs to be sought to consider whether any of these requirements apply to the Generator or Corporate when entering into the VPPA.

Opportunities and threats

Corporate Consumer


  • Fix/floor/cap power price – safeguard against rising or fluctuating energy prices in the wholesale markets.
  • Achieve sustainability targets and objective to buy 100% of power demand from renewable sources. This is fast becoming more important than economic drivers.
  • Smaller corporates can join together to share risk and enhance bargaining power.
  • Blockchain PPAs will make it easier to aggregate demand with other corporates and enter the market.
  • New technology emerging to enable 24/7 purchase of renewable power (e.g. Google).


  • Board appetite for the deal – economic benefits only add up if the board trusts the power price forecasts. Board is often unwilling to pay more in short-term for lower prices in long term. This is a particular risk this year, given current extremely high year-ahead pricing.
  • Complexity/costs in negotiating the contracts. Power purchase is not core business. This will pose a hurdle for small and medium sized enterprises.
  • A utility will still be required to provide power when the generating station is not generating (renewable power is intermittent). Allocation of volume and shaping risk is a key issue – it can affect the level of price certainty that is achieved and means the corporate is buying power at a profile/volume that doesn't match its demand.
  • If a project finance lender has financed a project, it may require further security from the corporate: e.g. direct agreement or parent company guarantees.
  • Change in law risks affecting the commercial balance of the deal and triggering renegotiation.



  • Generator can achieve a stable price over the long- term as the corporate often has more appetite to hedge against rising/fluctuating power prices. This is particularly attractive for projects financed by investment funds and project finance.
  • The corporate is sometimes willing to pay higher than wholesale prices in the short term, with the expectation that this will pay off in the long-term when prices rise and the corporate still has the benefit of the fixed price.
  • The phasing out of renewable subsidies means that Corporate PPAs offer a new route to market for generators.
  • Blockchain PPAs are an easier route to match generation with corporate demand and to access higher tariffs.


  • Price – the price the corporate is willing to pay may not be sufficient to bank the project.
  • Creditworthiness/bankability of offtaker – a bigger issue for unsubsidised projects as the Corporate PPA will represent almost 100% of total project revenues.
  • Power offtake not core business for the corporate: if wholesale power prices decline will the corporate default in order to buy their way out of a bad bargain?
  • Inconsistencies between regulatory regimes in different member states making it difficult to achieve scale across jurisdictions with one offtaker.
  • The deal will need to be bankable. More complex to get a Corporate PPA approved by banks/investors?
  • Optimisation and energy storage.

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1. Statista (2023, March 30). Renewable PPA contracted capacity globally 2012 – 2022. https://www.statista.com/statistics/1375942/renewable-ppa-capacity-worldwide/

2. S&P Global Commodity Insights (2023, March 2). Global Corporate Clean Energy Procurement Crosses 50GW with Asia as the Largest Region in 2022. https://www.spglobal.com/commodityinsights/en/ci/research-analysis/global-corporate-clean-energy-procurement-crosses50-gw.html

3. Bloomberg NEF (2023, February 9). Corporations Brush Aside Energy Crisis, Buy Record Clean Power. https://about.bnef.com/blog/corporations-brush-aside-energy-crisis-buy-record-clean-power/

4. S&P Global Commodity Insights (2023, May) European PPA market continues to grow in the first quarter of 2023 www.spglobal.com/commodityinsights/en/ci/research-analysis/european-ppa-market-continues-to-grow-in-the-first-quarter-2023.html.

5. S&P Global Commodity Insights (2023, July) European PPA market on track to reach record number of deals this year www.spglobal.com/commodityinsights/en/market-insights/latest-news/electric-power/072523-european-ppa-market-on-track-to-reach-record-number-ofdeals-this-year.

6. GreenBiz (2023, 17 February) 150GW later: the dizzying rise of the power purchase agreement www.greenbiz.com/article/150-gw-later-dizzying-rise-power-purchaseagreement

7. Ibid

8. Ibid at Note 4

9. Ibid at Note 4

10. Ibid

11. Ibid

12. Ibid

13. Ibid at Note 5

14. Ibid

15. Europäisches Parliament Think Tank (europa.eu) (2023, 22 March) www.europarl.europa. eu/thinktank/de/document/EPRS_BRI(2021)698781

16. European Commission (2023, 14 March) Reform of the EU electricity market design ec.europa.eu/commission/presscorner/detail/en/IP_23_1591

17. Ibid

18. Ibid

Originally published by Bird & Bird.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.