2min chapter

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Taiwan looks to play nice with Trump

FT News Briefing

CHAPTER

Corporate Commitments Driving Renewable Energy Growth

This chapter explores the 35% increase in long-term renewable energy agreements, largely propelled by tech giants such as Amazon and Google. It highlights how these corporate commitments help stabilize financing in a fluctuating clean energy market amid challenges like inflation and reduced government support.

00:00
Speaker 1
So
Speaker 2
the answer is a lot. There was a 35% jump in the amount of renewable power sold under these long-term agreements last year. And the total amount of renewable power, like communatively, sold under these agreements is now, I think, somewhere around 270 gigawatts, which is the equivalent of all of the power in Germany. That increase has basically been entirely driven by tech companies. Amazon is the biggest, and then all of the others are in there, Google, Meta, Apple, so on. And the reason they're doing this is because they're promised that their data centers that they're using to train AI and all those other things are going to be powered by green energy. So they are looking for the power as they build out those data centers. Can
Speaker 1
you explain the sort of commitments that these companies are making? Yeah.
Speaker 2
So the best way to explain it is that these are long-term deals directly between the people who are building the wind farms or the solar farms and the companies themselves. And it just stretches over a set period of time. So you'll say, I'll take this percentage and I'll pay this much for this many years. And for banks, that's a really big deal these days. They want to be able to see or have some certainty over the long-term future of these projects. Now,
Speaker 1
as we've been talking about, this is helping to fill the gap left by governments in clean energy. What happened there? What
Speaker 2
we've seen is that there was a lot of enthusiasm pre-COVID from governments to really make the energy transition happen and to plow a lot of public money into renewable electricity. But now there are just lots of other spending concerns. You know, they need to spend more money on defense. They need to spend more money on other things. And so there isn't really quite as much money around. Now, on top of that, of course, there's been a lot of inflation, and that's also hit the people building wind farms and solar farms. And then, of course, interest rates are higher. So with all of these things layered on top of each other, it's become really a lot more uncertain for people who want to build these things. And so although we're still seeing record amounts of solar being installed and record amounts of wind being built, the growth has really started to slow down and the picture is much less rosy. So
Speaker 1
to what extent can these contracts from big businesses offset some of these problems?

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