Understanding the CPPA Landscape in Asia Pacific

Asia Pacific Corporate Power Purchase Agreements (CPPAs) are becoming the go-to approach for corporations advancing towards net zero.

KPMG has released the report “Decarbonizing with Renewables: Understanding the Asia-Pacific Corporate Power Purchase Agreement Landscape”, which provides an overview of the renewable energy market in the Asia-Pacific region.

There is no doubt that the whole world is striving for Net Zero. In the Philippines, corporate leaders launched energy efficiency actions in 2017 when the Department of Energy released the Energy Efficiency Roadmap 2017-2040.

“The key to reducing our carbon footprint is corporate responsibility to ensure the sustainability of business operations,” said KPMG Philippines consultant and ESG chief Christine I. Aguirre. “The firm has delivered on its commitment by delivering services and performing simple yet powerful actions that raise awareness of ESG in the business world and society at large.”

In addition, the use of renewable energy sources is a growing trend in the Philippines. As of 2020, the renewable energy capacity ratio has reached 29.1 percent, with hydropower contributing the most (14.4 percent), followed by geothermal (7.3 percent), solar (3.9 percent), biomass (1.8 percent) and wind (1.7 percent). Michael Arcatomi Guarin, Head of Transactions Consultant in the Philippines and Head of the Energy Sector, said: “The Renewable Energy Campaign is a collaborative effort by all stakeholders in society. Important is the implementation in the Philippines of the alternative green energy program, which allows energy consumers to receive their own electricity from renewable energy sources.”

The report, which gives businesses a clear understanding of the CPPA market and summarizes both opportunities and barriers in the current renewable energy market, examines government policies and regulations, types of major electricity purchase contracts, and policies related to renewable energy. , and tasks of some large power plants. It then goes on to detail the electricity market structure, CPPA, renewable energy certification, policy, buying and selling cases in 12 Asia-Pacific markets.

The report highlights six key trends shaping the future development of the renewable energy market in the region.

1. The CPPA market in the Asia-Pacific region is even less developed, but has significant growth potential.

2. The legal and regulatory framework for changes to the CPPA structure is rapidly evolving in the region.

3. The phase-out of the generous FIT scheme is expected to boost demand for CPPA.

4. Economics and clean metering are driving rooftop solar installations and increasing on-site PPA adoption.

5. There is a growing interest in the Asia-Pacific region for CPPAs to meet their respective sustainability commitments.

6. The Asia-Pacific region is moving towards a low-carbon energy future.

As more countries respond to climate change and announce their commitment to Net Zero, support mechanisms and measures continue to evolve. In addition to domestic and foreign regulatory requirements, the enterprise’s need for sustainable operations and supply chains has also become a driving force for corporations to purchase green electricity.

The Paris Climate Agreement set the goal of achieving carbon neutrality and net zero carbon emissions by 2050. However, with the intensification of climate change and the global energy crisis caused by the war, the Russian government has risen in response.

Each market in the region has different progress in electricity market liberalization and regulatory frameworks, making it difficult to procure green energy and affecting the path to zero.

The excerpt was taken from the KPMG Thought Leadership publication: https://home.kpmg/xx/en/home/media/press-releases/2022/11/kpmgs-report-explores-renewable-energy-as-a-key-enabler -of-decarbonization.html

KPMG International Ltd. is a private English limited company and does not provide services to clients. For more information about KPMG in the Philippines, you can email ph-marketsph@kpmg.com or visit www.home.kpmg/ph.