COVID-19 has minimal impact on PPA prices in Europe and America

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
Italy continued to hold the top spot, with 31.7% of PPA offers in Europe. It's solar sector has continued to grow through 2020, including the completion of the nation's largest solar site to date. Image: European Energy.

COVID-19 has had a minimal impact on Power Purchase Agreement (PPA) offer prices, according to research from LevelTen Energy.

In the company’s Q4 PPA Price Index, it looks at how the most competitive (P25) PPA offers in North America and Europe have been affected by the pandemic in comparison with earlier in the year.

Solar prices in European PPA’s dropped slightly it found, falling a further 2.7% in Q4 in a continuation of a trend seen since Q2 2020. When combined with wind PPA’s – which alone saw a small dip of 1.7% in Q4 after growing earlier in the year – in the blended P25 Index, prices decreased by 2% from Q3.

In Europe the top market continued to be Italy, accounting for 31.7% of offers from developers, following by Spain, which driven by a booming solar industry took 26.7% of all offers.

PPA prices continued to rise through 2020 in America, but the COVID-19 pandemic is having a much larger impact on development timelines than on prices. Solar PPA offer prices began to rise in the US for the first time since 2018 LevelTen noted, although it was overtaken with wind price increases.

Year-on-year, wind and solar in the blended technology index saw offer prices for PPAs rise 17.7% in the US. This was driven by a number of factors, including COVID-19, grid connection delays and permitting challenges as Rob Collier, vice president of Developer Relations, LevelTen Energy explained.

Where there was a high demand for projects, these factors created a bottleneck, with supply constraints then putting upward pressure on prices.

“In addition, many of the most economically competitive projects have already contracted with offtakers, leaving higher-priced projects available in the market.”

However, project timelines were more greatly impacted than PPAs, with 59% of developers saying COVID delayed commercial operations dates, and 41% saying it delayed PPA negotiations and executions according to a survey by LevelTen.

“Some deals took a little longer than anticipated: procurement and finance teams were understandably focused on other priorities when shutdowns began, but as the world adjusted to a new normal, renewable energy transactions picked back up,” said Collier.

“We don’t expect the rising prices to soften demand in 2021, as boards of directors, investors, governments, employees and consumers will continue to push for sustainability commitments that will require all large energy consumers to turn toward renewables.”

Read Next

January 21, 2022
Toronto-based renewables developer Amp Energy has closed on a US$350 million credit facility to advance on a global portfolio of renewables and battery energy storage assets.
January 21, 2022
The European Commission has launched a public consultation on solar energy on the continent as it continues preparations to publish its solar strategy later this year.
January 19, 2022
Renewables developer R.Power has signed a power purchase agreement (PPA) with energy trader Axpo for nearly 300MWp of solar in Poland.
January 19, 2022
Energy major Shell has acquired 100% of PV project developer Solar-Konzept Italia (SKI), taking its solar development pipeline in Italy to around 2GW in the process.
PV Tech Premium
January 18, 2022
Solar project developer Eco Energy World is aiming to “aggressively” grow its US PV pipeline after formally entering the market last week and intends to replicate the cheaper engineering, procurement and construction (EPC) costs it sees in Europe in the country. PV Tech Premium speaks to CEO Svante Kumlin to find out more.
January 18, 2022
Spanish solar company Soltec Power Holdings, through its subsidiary Powertis, has sold a controlling stake in 421MW of its solar PV projects and 90MW of energy storage in Italy to German investment firm Aquila Capital under a co-development agreement.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
January 26, 2022
Free Webinar
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal