Pexapark’s Renewable Industry Outlook Report 2023
Pexapark, leading provider of renewable energy-focused analytics software, has shared the results of its 2023 Renewable Energy Industry Survey.
We consider the perspective of corporates in our contribution to the Survey Report.
‘Alone we could run fast, but together we could run further’. It is with this ethos of collaboration that act renewable was invited to provide expert commentary on the findings of Pexapark’s first-of-a-kind ‘Renewables Industry Survey’ leveraging our Teams’ expertise in the segments directed at the corporate market.
The extensive, industry-wide digital survey – which collated responses from practitioners operating across the global renewables industry – grasps ‘the pulse of the renewable energy industry active in the merchant markets.’ It forms part of an intensive research project and provides valuable insights into how different organizations are managing their renewable energy transactions and risk, spotlighting industry-wide emerging trends.
The timing of this market review is significant. It comes after a transformative 18 months for the energy sector, and Pexapark’s survey questions delve into some of the most critical issues impacting the renewables market today – risk management, energy price increases, Net Zero targets and more – with the intention of providing invaluable insights directly from market players themselves.
In 2022, the corporate share of the PPA market grew to more than 80% across Europe, demonstrating the growing demand for large-scale renewable energy amongst corporates. The dedicated ‘corporates chapter’ of the report digs deeper into this growing market and contains critical data points relating to energy procurement, including the drivers for PPAs, the tools utilized, hedging strategies, and risk tolerances preferred by corporates.
The survey uncovered the primary reason for corporate Power Purchase Agreement (PPA) activity is now hedging against price and market volatility, followed by securing lower-than-market prices and meeting sustainability targets.
Katharina Winter, Head of PPA Services at act renewable shares that “Largely, this was in line with what we expected, but it was reassuring to see that despite market turmoil, most corporate respondents have either maintained or advanced their Net Zero targets, with only a small minority postponing decarbonisation targets.”
The importance of emission reduction to corporates was further underlined in the strong preference for additionality in corporate PPA contracts – securing new projects that guarantee the addition of new renewable energy capacity to the grid. “Striking a deal with utilities is typically a shorter, potentially less extensive process to securing renewables,” says Katharina. “Despite this, we can see clearly from the responses to Pexapark’s survey that most corporates prefer to negotiate PPAs with developers in order to secure additionality and ultimately ensure credible emission reduction claims can be made.”
Our collaboration with Pexapark
act renewable blends a deep understanding of the corporate PPA market and experience in effectively balancing associated business risks and opportunities. Our in-house PPA advisory team leverages Pexapark and its suite of quantitative and analytical tools to help corporates understand the fair value of energy and how to quantify price risks.
Pexapark corporate services are tailored to both experienced energy traders in industrial corporations and corporates seeking to ensure their operations are powered by renewable energy. Its software solutions compare different PPA structures and look at the overall value of PPAs across their total duration.
Together, act renewable and Pexapark collaborate to provide leading corporate renewable energy advisory and data analytics capabilities to enable our clients to approach the corporate PPA market in a fully informed and structured manner.
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