Virtual Power Purchase Agreement Market
Virtual Power Purchase Agreement Market Forecasts to 2030 - Global Analysis By Contract Type (Fixed, Price Contracts, Floating Price Contracts and Other Contract Types), Energy Buyer Type, Power Generation Capacity, Technology, End User and By Geography
According to Stratistics MRC, the Global Virtual Power Purchase Agreement Market is growing at a CAGR of 31.7% during the forecast period. A Virtual Power Purchase Agreement (VPPA) is a financial contract between a buyer, typically a corporation, and a renewable energy developer. It allows the buyer to purchase renewable energy credits (RECs) generated by a specific renewable energy project without directly taking physical delivery of the electricity. VPPAs enable companies to offset their carbon emissions, achieve sustainability goals, and secure fixed energy prices over a long term, providing a stable revenue stream for renewable energy projects.
Market Dynamics:
Driver:
Energy market volatility
Energy market volatility, fluctuating energy prices can expose businesses to financial risks, making it challenging to budget for energy expenditures. VPPAs offer a solution by locking in fixed prices for renewable energy over the contract's duration, providing a hedge against market fluctuations. This stability not only aids in financial planning but also aligns with corporate sustainability goals, as companies can purchase renewable energy credits (RECs) to offset their carbon emissions, enhancing their green credentials in an uncertain energy landscape, propelling the growth of the market.
Restraint:
Long-term commitments
Long-term commitments may hesitate to enter into lengthy contracts, fearing changes in operational requirements or market conditions that could lead to surplus energy or inadequate supply. Additionally, companies facing economic downturns or fluctuations in their financial stability might struggle to fulfil their contractual obligations, resulting in potential losses or penalties. This uncertainty can deter participation in the VPPA market, limiting its growth and adoption among organizations.
Opportunity:
Expansion into emerging markets
Expansion into emerging markets such as developing economies increasingly adopt renewable energy targets and regulatory frameworks, corporations seeking sustainable practices can enter these markets through VPPAs. This expansion attracts foreign investment and fosters partnerships between local energy developers and global companies. Moreover, rising energy demands in emerging markets create a conductive environment for VPPAs, enabling companies to hedge against price volatility while supporting the transition to clean energy and promoting the growth of the market.
Threat:
Competition from other energy solutions
Competition from other energy solutions, such as traditional power purchase agreements (PPAs), direct energy procurement, and emerging technologies offer more flexible or immediate options for companies. These alternatives may provide easier access to renewable energy or lower upfront costs, making them attractive to organizations seeking quick, cost-effective solutions. Additionally, advancements in distributed energy resources can further challenge VPPAs, reducing their reliance on long-term financial contracts of the market.
Covid-19 Impact
The COVID-19 pandemic initially disrupted the Virtual Power Purchase Agreement (VPPA) market by causing uncertainty in energy demand and project timelines. However, it accelerated the shift towards renewable energy as companies’ increasingly prioritized sustainability and resilience in their operations. Many organizations sought VPPAs to stabilize energy costs and achieve carbon neutrality amidst economic volatility. Overall, the pandemic reinforced the importance of renewable energy investments, leading to a rebound and growth in the VPPA market as businesses adapted to new realities.
The industrial segment is expected to be the largest during the forecast period
Over the estimation period, the industrial segment is likely to capture the largest market share, due to high demand for renewable energy to meet sustainability and carbon reduction targets. Industries, especially those with high energy consumption, seek VPPAs to stabilize energy costs and hedge against market volatility. Additionally, as corporations face increasing pressure from stakeholders to adopt environmentally friendly practices, VPPAs offer a viable solution to source green energy. This segment's commitment to reducing carbon footprints and enhancing corporate social responsibility initiatives further stimulates growth in the VPPA market.
The wind power segment is expected to have the highest CAGR during the forecast period
Over the forecast period, the wind power segment is predicted to witness the highest growth rate, due to cost-effective and sustainable energy solution. With decreasing costs of wind energy technology and strong government support, companies are increasingly entering into VPPAs to secure long-term, fixed pricing for renewable energy. This not only helps them meet sustainability targets but also hedges against market price volatility. Additionally, the abundance of wind resources in various regions makes it easier for businesses to engage in VPPAs, thus driving growth in the market.
Region with largest share:
Over the forecast period, the Asia Pacific region is anticipated to hold the largest market share due to increased corporate sustainability initiatives and government support for renewable energy. Countries like India, Australia, and Japan are leading the way, offering favourable policies that encourage the adoption of VPPAs. The growing demand for clean energy, coupled with declining costs of renewable technologies, particularly wind and solar, further fuels this growth. Additionally, multinational corporations operating in the region are leveraging VPPAs to meet their environmental goals, thus enhancing the market's potential.
Region with highest CAGR:
During the forecast period, the North America region is anticipated to register the highest CAGR, owing to corporate sustainability initiatives and a robust demand for renewable energy. Major companies are leveraging VPPAs to meet renewable energy targets and reduce carbon footprints, particularly in the wind and solar sectors. Supportive regulatory frameworks and tax incentives further encourage investment in renewable projects. As more corporations seek long-term energy price stability amid market volatility, the North American VPPA market is expected to expand, facilitating a significant transition towards a cleaner energy future.
Key players in the market
Some of the key players profiled in the Virtual Power Purchase Agreement Market include Google , Amazon (Amazon Web Services), Microsoft Corporation, Meta (Facebook), Apple Inc., IKEA Group, Walmart Inc., General Motors (GM), Tesla, Inc., Shell Energy, BP (British Petroleum), NextEra Energy, Inc., Ørsted A/S, EDF Renewables, Enel Green Power, Engie, Duke Energy, Siemens Gamesa Renewable Energy, Vattenfall AB and Invenergy LLC .
Key Developments:
In August 2024, Amazon.com, Inc. announced partnership with Iberdrola for generative artificial intelligence (AI) workloads. This collaboration unified data approach with AI and machine learning capabilities will help AWS build smarter and more secure networks to automate smart grids and more easily integrate renewable energy.
In July 2024, Amazon.com, Inc. Company announced an expanded partnership with Workday, Inc, improve decision-making, and develop generative AI Solutions. Together, AWS and Workday, jointly go-to-market initiatives to accelerate customer cloud transformation, helping customers increase productivity, grow and retain talent.
In June 2024, AWS had partnered with Formula 1® launched generative AI-designed trophy for Canadian Grand Prix. This partnership will push the boundaries of innovation, Formula 1 is set to introduce generative artificial intelligence (generative AI) through AWS tools, to drive creativity and solutions throughout the sport, as well as increasing operational efficiency.
Contract Types Covered:
• Fixed Price Contracts
• Floating Price Contracts
• Other Contract Types
Energy Buyer Types Covered:
• Corporates
• Utilities
• Government Entities
• Other Energy Buyer Types
Power Generation Capacities Covered:
• Less than 50 MW
• 50 MW - 150 MW
• 150 MW - 300 MW
• More than 300 MW
Technologies Covered:
• Solar Power
• Wind Power
• Hydropower
• Biomass Energy
• Geothermal Energy
• Other Technologies
End Users Covered:
• Commercial
• Industrial
• Utilities
• Government and Public Sector
• Educational Institutions
• Other End Users
Regions Covered:
• North America
o US
o Canada
o Mexico
• Europe
o Germany
o UK
o Italy
o France
o Spain
o Rest of Europe
• Asia Pacific
o Japan
o China
o India
o Australia
o New Zealand
o South Korea
o Rest of Asia Pacific
• South America
o Argentina
o Brazil
o Chile
o Rest of South America
• Middle East & Africa
o Saudi Arabia
o UAE
o Qatar
o South Africa
o Rest of Middle East & Africa
What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2022, 2023, 2024, 2026, and 2030
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements
Free Customization Offerings:
All the customers of this report will be entitled to receive one of the following free customization options:
• Company Profiling
o Comprehensive profiling of additional market players (up to 3)
o SWOT Analysis of key players (up to 3)
• Regional Segmentation
o Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances
Table of Contents
1 Executive Summary
2 Preface
2.1 Abstract
2.2 Stake Holders
2.3 Research Scope
2.4 Research Methodology
2.4.1 Data Mining
2.4.2 Data Analysis
2.4.3 Data Validation
2.4.4 Research Approach
2.5 Research Sources
2.5.1 Primary Research Sources
2.5.2 Secondary Research Sources
2.5.3 Assumptions
3 Market Trend Analysis
3.1 Introduction
3.2 Drivers
3.3 Restraints
3.4 Opportunities
3.5 Threats
3.6 Technology Analysis
3.7 End User Analysis
3.8 Emerging Markets
3.9 Impact of Covid-19
4 Porters Five Force Analysis
4.1 Bargaining power of suppliers
4.2 Bargaining power of buyers
4.3 Threat of substitutes
4.4 Threat of new entrants
4.5 Competitive rivalry
5 Global Virtual Power Purchase Agreement Market, By Contract Type
5.1 Introduction
5.2 Fixed Price Contracts
5.3 Floating Price Contracts
5.4 Other Contract Types
6 Global Virtual Power Purchase Agreement Market, By Energy Buyer Type
6.1 Introduction
6.2 Corporates
6.3 Utilities
6.4 Government Entities
6.5 Other Energy Buyer Types
7 Global Virtual Power Purchase Agreement Market, By Power Generation Capacity
7.1 Introduction
7.2 Less than 50 MW
7.3 50 MW - 150 MW
7.4 150 MW - 300 MW
7.5 More than 300 MW
8 Global Virtual Power Purchase Agreement Market, By Technology
8.1 Introduction
8.2 Solar Power
8.3 Wind Power
8.4 Hydropower
8.5 Biomass Energy
8.6 Geothermal Energy
8.7 Other Technologies
9 Global Virtual Power Purchase Agreement Market, By End User
9.1 Introduction
9.2 Commercial
9.2.1 Retail
9.2.2 Tech or IT Companies
9.2.3 Manufacturing
9.3 Industrial
9.4 Utilities
9.5 Government and Public Sector
9.6 Educational Institutions
9.7 Other End Users
10 Global Virtual Power Purchase Agreement Market, By Geography
10.1 Introduction
10.2 North America
10.2.1 US
10.2.2 Canada
10.2.3 Mexico
10.3 Europe
10.3.1 Germany
10.3.2 UK
10.3.3 Italy
10.3.4 France
10.3.5 Spain
10.3.6 Rest of Europe
10.4 Asia Pacific
10.4.1 Japan
10.4.2 China
10.4.3 India
10.4.4 Australia
10.4.5 New Zealand
10.4.6 South Korea
10.4.7 Rest of Asia Pacific
10.5 South America
10.5.1 Argentina
10.5.2 Brazil
10.5.3 Chile
10.5.4 Rest of South America
10.6 Middle East & Africa
10.6.1 Saudi Arabia
10.6.2 UAE
10.6.3 Qatar
10.6.4 South Africa
10.6.5 Rest of Middle East & Africa
11 Key Developments
11.1 Agreements, Partnerships, Collaborations and Joint Ventures
11.2 Acquisitions & Mergers
11.3 New Product Launch
11.4 Expansions
11.5 Other Key Strategies
12 Company Profiling
12.1 Google
12.2 Amazon (Amazon Web Services)
12.3 Microsoft Corporation
12.4 Meta (Facebook)
12.5 Apple Inc.
12.6 IKEA Group
12.7 Walmart Inc.
12.8 General Motors (GM)
12.9 Tesla, Inc.
12.10 Shell Energy
12.11 BP (British Petroleum)
12.12 NextEra Energy, Inc.
12.13 Ørsted A/S
12.14 EDF Renewables
12.15 Enel Green Power
12.16 Engie
12.17 Duke Energy
12.18 Siemens Gamesa Renewable Energy
12.19 Vattenfall AB
12.20 Invenergy LLC
List of Tables
1 Global Virtual Power Purchase Agreement Market Outlook, By Region (2022-2030) ($MN)
2 Global Virtual Power Purchase Agreement Market Outlook, By Contract Type (2022-2030) ($MN)
3 Global Virtual Power Purchase Agreement Market Outlook, By Fixed Price Contracts (2022-2030) ($MN)
4 Global Virtual Power Purchase Agreement Market Outlook, By Floating Price Contracts (2022-2030) ($MN)
5 Global Virtual Power Purchase Agreement Market Outlook, By Other Contract Types (2022-2030) ($MN)
6 Global Virtual Power Purchase Agreement Market Outlook, By Energy Buyer Type (2022-2030) ($MN)
7 Global Virtual Power Purchase Agreement Market Outlook, By Corporates (2022-2030) ($MN)
8 Global Virtual Power Purchase Agreement Market Outlook, By Utilities (2022-2030) ($MN)
9 Global Virtual Power Purchase Agreement Market Outlook, By Government Entities (2022-2030) ($MN)
10 Global Virtual Power Purchase Agreement Market Outlook, By Other Energy Buyer Types (2022-2030) ($MN)
11 Global Virtual Power Purchase Agreement Market Outlook, By Power Generation Capacity (2022-2030) ($MN)
12 Global Virtual Power Purchase Agreement Market Outlook, By Less than 50 MW (2022-2030) ($MN)
13 Global Virtual Power Purchase Agreement Market Outlook, By 50 MW - 150 MW (2022-2030) ($MN)
14 Global Virtual Power Purchase Agreement Market Outlook, By 150 MW - 300 MW (2022-2030) ($MN)
15 Global Virtual Power Purchase Agreement Market Outlook, By More than 300 MW (2022-2030) ($MN)
16 Global Virtual Power Purchase Agreement Market Outlook, By Technology (2022-2030) ($MN)
17 Global Virtual Power Purchase Agreement Market Outlook, By Solar Power (2022-2030) ($MN)
18 Global Virtual Power Purchase Agreement Market Outlook, By Wind Power (2022-2030) ($MN)
19 Global Virtual Power Purchase Agreement Market Outlook, By Hydropower (2022-2030) ($MN)
20 Global Virtual Power Purchase Agreement Market Outlook, By Biomass Energy (2022-2030) ($MN)
21 Global Virtual Power Purchase Agreement Market Outlook, By Geothermal Energy (2022-2030) ($MN)
22 Global Virtual Power Purchase Agreement Market Outlook, By Other Technologies (2022-2030) ($MN)
23 Global Virtual Power Purchase Agreement Market Outlook, By End User (2022-2030) ($MN)
24 Global Virtual Power Purchase Agreement Market Outlook, By Commercial (2022-2030) ($MN)
25 Global Virtual Power Purchase Agreement Market Outlook, By Retail (2022-2030) ($MN)
26 Global Virtual Power Purchase Agreement Market Outlook, By Tech or IT Companies (2022-2030) ($MN)
27 Global Virtual Power Purchase Agreement Market Outlook, By Manufacturing (2022-2030) ($MN)
28 Global Virtual Power Purchase Agreement Market Outlook, By Industrial (2022-2030) ($MN)
29 Global Virtual Power Purchase Agreement Market Outlook, By Utilities (2022-2030) ($MN)
30 Global Virtual Power Purchase Agreement Market Outlook, By Government and Public Sector (2022-2030) ($MN)
31 Global Virtual Power Purchase Agreement Market Outlook, By Educational Institutions (2022-2030) ($MN)
32 Global Virtual Power Purchase Agreement Market Outlook, By Other End Users (2022-2030) ($MN)
Note: Tables for North America, Europe, APAC, South America, and Middle East & Africa Regions are also represented in the same manner as above.
List of Figures
RESEARCH METHODOLOGY
We at ‘Stratistics’ opt for an extensive research approach which involves data mining, data validation, and data analysis. The various research sources include in-house repository, secondary research, competitor’s sources, social media research, client internal data, and primary research.
Our team of analysts prefers the most reliable and authenticated data sources in order to perform the comprehensive literature search. With access to most of the authenticated data bases our team highly considers the best mix of information through various sources to obtain extensive and accurate analysis.
Each report takes an average time of a month and a team of 4 industry analysts. The time may vary depending on the scope and data availability of the desired market report. The various parameters used in the market assessment are standardized in order to enhance the data accuracy.
Data Mining
The data is collected from several authenticated, reliable, paid and unpaid sources and is filtered depending on the scope & objective of the research. Our reports repository acts as an added advantage in this procedure. Data gathering from the raw material suppliers, distributors and the manufacturers is performed on a regular basis, this helps in the comprehensive understanding of the products value chain. Apart from the above mentioned sources the data is also collected from the industry consultants to ensure the objective of the study is in the right direction.
Market trends such as technological advancements, regulatory affairs, market dynamics (Drivers, Restraints, Opportunities and Challenges) are obtained from scientific journals, market related national & international associations and organizations.
Data Analysis
From the data that is collected depending on the scope & objective of the research the data is subjected for the analysis. The critical steps that we follow for the data analysis include:
- Product Lifecycle Analysis
- Competitor analysis
- Risk analysis
- Porters Analysis
- PESTEL Analysis
- SWOT Analysis
The data engineering is performed by the core industry experts considering both the Marketing Mix Modeling and the Demand Forecasting. The marketing mix modeling makes use of multiple-regression techniques to predict the optimal mix of marketing variables. Regression factor is based on a number of variables and how they relate to an outcome such as sales or profits.
Data Validation
The data validation is performed by the exhaustive primary research from the expert interviews. This includes telephonic interviews, focus groups, face to face interviews, and questionnaires to validate our research from all aspects. The industry experts we approach come from the leading firms, involved in the supply chain ranging from the suppliers, distributors to the manufacturers and consumers so as to ensure an unbiased analysis.
We are in touch with more than 15,000 industry experts with the right mix of consultants, CEO's, presidents, vice presidents, managers, experts from both supply side and demand side, executives and so on.
The data validation involves the primary research from the industry experts belonging to:
- Leading Companies
- Suppliers & Distributors
- Manufacturers
- Consumers
- Industry/Strategic Consultants
Apart from the data validation the primary research also helps in performing the fill gap research, i.e. providing solutions for the unmet needs of the research which helps in enhancing the reports quality.
For more details about research methodology, kindly write to us at info@strategymrc.com
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