Corporate Power Purchase Agreements: A Policy Perspective

“The market for power purchase agreements (PPAs) has exploded in the last decade due, in part, to non-utility entities (e.g., corporations) attempting to meet greenhouse gas (GHG) emission reduction targets. Recent empirical research has explored the effects of this PPA activity on the renewable energy (RE) transition. It finds that PPAs are associated with increases in the deployment and share of RE capacity in U.S. counties, but the effects are heterogeneous in three important ways—whether PPAs are executed by non-utility or utility entities, the project type (solar or wind), and the resource potential of the region. This paper discusses the policy implications of these findings, including instances in which non-utility PPAs may serve as substitutes or complements to traditional RE policies (e.g., Renewable Portfolio Standards) and RE investment by utilities. The paper also discusses the implications for GHG accounting, including the ongoing update to the GHG Protocol guidance.”

Citation: Backstrom, Jesse D. and Gillenwater, Michael and Brander, Matthew and Inman, Charlie, Corporate Power Purchase Agreements: A Policy Perspective (January 28, 2024). Available at SSRN: https://ssrn.com/abstract=4708811 or http://dx.doi.org/10.2139/ssrn.4708811

Cover image via Unsplash: Thomas Reaubourg.