Enerdatics has observed a shift in the corporate PPA patterns of the five largest renewable energy suppliers in the US - NextEra, AES, EDP Renewables, DTE Energy and Enel Green Power. Since the start of 2022, these power producers have been targeting large-scale industrial off-takers in the automotive and metals segments, while volumes contracted to technology and telecom firms have declined significantly. NextEra’s recent ~300 MW PPA with Steel Dynamics for its Canyon Wind project in Texas’s ERCOT market is the latest evidence in this shift. Last year, DTE Energy signed a 650 MW PPA with Ford Motor and a 400 MW PPA with European automaker Stellantis. Meanwhile, AES finalized contracts for the supply of 600 MW of clean power to copper miner Codelco in 2022.
Enerdatics hypothesizes that this shift reflects the ease with which major power producers can sign large-scale, long-term supply deals with industrial off-takers. While tech firms have historical lead the charge on clean power procurement, Enerdatics believes that the rapidly rising demand from the industrial sector and volatility in power prices allows for contract negotiations with the latter on more favorable terms, compared with the former.
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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