Corporate PPA: Amazon signs nearly 700 MW of power purchase agreements (PPAs) with Iberdrola and Grenergy in Europe

published on 31 March 2023
Amazon signs nearly 800 MW of power purchase agreements (PPAs) with Iberdrola and Grenergy in Europe-di4pz

The agreement with Iberdrola will supply Amazon with ~303 MW or 1.1TWh/yr of offshore wind energy in Germany. The power will be sourced from two of Iberdrola’s projects in the Baltic sea - the 476 MW Baltic Eagle and the 300 MW Windanker. The projects are expected to enter commercial operation between 2024 and 2026. The PPA is part of a collaboration between Amazon and Iberdrola under which the companies aim to develop additional solar and wind capacity across major markets in Europe, the US, and Asia-Pacific. For the Windanker project, Iberdrola also signed a PPA with German automobile major Mercedes-Benz for the wind farm’s remaining ~140 MW of capacity. 

In a separate agreement, Amazon signed a long-term PPA with Grenergy Renovables for 665 GWh/yr of solar energy in Spain. The power will be sourced from three of Grenergy’s solar projects in the country - the 47-MW Jose Cabrera and the 172-MWp Ayora. The projects are expected to enter commercial operations in 2024. The agreement represents Grenergy’s second corporate PPA signed this month and follows its 259 MW solar PPA with chemical company LyondellBasell, also in Spain. 

The current PPAs augment Amazon’s contracted renewable energy capacity, which stands at over 20 GW and will help the tech giant cover 100% of its operations with renewable power by 2025. In 2022, the company signed 8.3 GW of new PPAs for 133 new projects in 11 countries, bringing its total portfolio to 401 projects in 22 countries. In Europe, Amazon announced in Jan’23 that it has 80 on-site solar and 48 large-scale wind and solar projects with a total capacity of more than 4,6 GW. The recent PPAs would increase that capacity to well over 5 GW.

Since the start of 2022, the PPA market in Europe and North America has been challenged by project cost inflation, which is attributed to rising commodity prices and supply-chain bottlenecks. However, Enerdatics observes that the demand for clean power by energy-intensive sectors in these regions, particularly technology, and telecommunications, has stayed strong. As per Enerdatics data, tech and telecom companies in Europe signed nearly 4 GW of PPAs in 2022, representing a marginal year-on-year increase from 2021 contracted volumes. So far in 2023, we have observed ~1.4 GW of PPAs across the continent, with the major deals including IGNIS Group’s 225 MW PPA with Equinix in Spain, Electrohold’s 123 MW agreement with PPF Telecom in Bulgaria, and ENGIE’s 116 MW off-take agreement with Digital Realty in Germany. As per a recent report by the EU, the energy demand from data centers in member states alone could account for over 100 TWh by 2030, which will drive tech giants such as Amazon, Meta, Google, and Microsoft to sign long-term PPAs for large-scale offshore and onshore renewable energy projects.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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