In 2024, global corporate PPA volumes reached record highs once again, underscoring the growing role these agreements now play in accelerating the energy transition and helping companies achieve their net zero pathways.
However, beyond the headline growth, the motivations driving corporate PPA adoption and the urgency to act are shifting in important ways, particularly against a backdrop of new geopolitical instability and resurging energy price risks. This shift is setting PPAs as a cornerstone of the modern energy transition.
For many companies, Power Purchase Agreements were initially a way to buy renewable energy at scale and claim environmental benefits. But as the clean energy transition accelerates, their role has expanded. Today, they serve as a multifunctional strategic tool: a hedge against market volatility, a route to potential cost savings and a differentiator in delivering meaningful impact on reducing carbon emissions.
The market turbulence of pandemic disruptions, geopolitical shocks, inflation and supply chain instability exposed short-term buying strategies to unparalleled volatility. Now, halfway through 2025, several trends reinforce the value of acting decisively and thinking long-term:
These dynamics make now a critical window for corporate buyers to act, not despite uncertainty, but because of it.
The regulatory environment is no longer playing catch-up to corporate climate ambition—it’s overtaking it. The EU’s Corporate Sustainability Reporting Directive (CSRD) and emerging standards like 24/7 Carbon-Free Energy (CFE) are raising the bar for credible, auditable emissions reporting.
Unlike unbundled renewable energy certificates (RECs), Power Purchase Agreements offer companies traceable renewable energy from a specific project. This provides clear additionality (proof that your investment led to new green energy capacity) and stronger assurance for auditors and stakeholders that emissions reductions are real.
For companies serious about meeting RE100 targets, the Science Based Targets initiative (SBTi), or net zero commitments, PPAs increasingly represent the gold standard for reducing scope 2 emissions.
Energy is now a core business risk, not just a utility cost. Recent events have reminded markets how quickly geopolitical conflict can spill over into energy pricing and security.
In this context, PPAs empower companies to:
For companies not yet fully leveraging PPAs, the risk isn’t just missing out on sustainability benefits—it’s missing an opportunity to proactively manage energy cost and regulatory exposure.
Stakeholders, from investors to regulators to customers, are scrutinising how companies decarbonise, not just if they do. Traceability, impact and credibility matter more than ever.
PPAs enable companies to clearly demonstrate:
In this environment, how companies procure clean energy matters just as much as how much they procure.
While the PPAs market is more mature and accessible than ever, external risks are re-emerging, and competition for top-tier projects is intensifying. Companies that wait may face significant disadvantages, including higher prices for renewable energy due to the constrained supply of high-quality projects. Also, they risk encountering limited availability of high-impact projects situated in desirable locations, which could hinder their ability to meet specific environmental goals or operational needs. Critically, delays in securing PPAs can also lead to serious setbacks in meeting crucial compliance and disclosure deadlines, potentially resulting in regulatory penalties or reputational damage.
On the other hand, those companies that act as early movers can secure a multitude of advantages. They stand to gain access to high-quality projects and negotiate better commercial terms, optimizing their long-term energy costs and sustainability investments. These early commitments also offer strategic advantages in corporate sustainability reporting and enhance investor perception, positioning them as leaders in the clean energy transition. Ultimately, by acting decisively, companies can establish greater stability in an increasingly unpredictable energy landscape, safeguarding their operations and future-proofing their energy supply against market fluctuations and geopolitical uncertainties.
For companies seeking to use PPAs as a true strategic asset, successful execution requires preparation and expertise:
Think beyond price: Evaluate project developer credibility, data transparency and alignment with future carbon accounting standards
In short, PPAs are no longer just an optional tool for companies simply interested in sustainability. They have become central to credible net zero pathways, proactive energy risk management and building long-term resilience in an increasingly regulated and scrutinised business environment.
The companies that approach PPA sourcing as a strategic, not just procurement, decision will be best positioned to lead in the clean energy transition.
Contact us today to develop a tailored strategy that drives long-term success and aligns with global climate goals.
