Corporations are no longer waiting to buy power from utilities: they’re going straight to the source. Increasingly, that means renewable power. For the first time, big companies and non-utilities bought up more than half of all wind-power capacity sold in 2015. That’s a big departure from years past when utilities were nearly the only buyers in town.
What’s happening? Wind power prices have hit all-time lows, and the value of locking in cheap electricity contracts is rising as energy market volatility makes finance chiefs nervous. These factors, along with environmental concerns, have driven demand for wind power among corporate and other buyers like municipalities. Last year, those buyers represented about 52% of wind power contracted compared to just 5% in 2013, says the American Wind Energy Association, which released new data this week.
Technology companies have led the way. Amazon Web Services, Hewlett-Packard, Salesforce, Google, and other firms bought 1,334 MW of wind power to run their servers and searches in 2015, more than a a third of the total. Tech companies have sought out stable, cheap electricity because it consumes so much of their budget. Google, the world’s largest non-utility buyer of renewables, historically spends more on electricity (pdf, p 31) than any other operating cost except its employees. The rest of the Fortune 500 is now buying in as well. Procter & Gamble, General Motors, Walmart, and Dow Chemical all signed large wind power contracts last year.
The wind-power industry is regaining its footing after a turbulent decade. Policymakers pulled the rug out from wind developers when tax credits expired in 2013, making many new wind facilities unprofitable. Congress extended long-term tax credits last year in a surprising bi-partisan vote that should drive $35 billion in new wind investments through 2021, reports Bloomberg.
This is all good news for new wind development: 41% of all additional US capacity last year came from wind turbines. As companies’ appetite for cheap and clean power grows, the industry may finally have the wind at its back.