Europe’s most competitive renewable power purchase agreement (PPA) offers rose 8% quarter-on-quarter as Europe’s worsening energy crisis bites, according to US firm LevelTen Energy’s Q3 2021 PPA Price Index report.
The index analyses more that 4,000 solar and wind pricing offers across 21 countries in Europe and North America.
Europe’s P25 Index – an aggregation of the lowest 25% of wind and solar PPA offers – now stands at €48.68/MWh (US$56.40/MWh), rising €3.59 (US$4.16) from Q2.
While Europe’s P25 solar PPA prices rose 5.5% to €44.73/MWh, the larger increase came from wind power, which jumped 10.3% to €52.64/MWh. This was partly down to substantial wind PPA price rises in Germany and the UK (13.4% and 16.1%, respectively). In both countries increasing capex costs and supply chain constraints have added to the pressure being created by the European energy crisis.
Spain’s solar PPA price offers have flattened after a decision by the government to stem runaway electricity prices by reducing renewable energy generation, leading to developers pausing investments. Nonetheless, it remains the continent’s hottest market with 41.18% of marketplace offers, said the report.
In Italy, solar PPA prices have remained flat. The Italian government has taken a subsidy approach to mitigating wholesale price increases, rather than limiting renewable revenues outright. Due in part to Italy’s onerous permitting processes, the country’s PPA offer market share has fallen significantly, from 31.3% at the beginning of the year to 10.7% in Q3.
The country’s state energy agency, however, has launched a new renewables tender that is expected to allocate 3,312MW of solar PV and wind capacity.
In August, LevelTen Energy secured the backing of Google as part of a US$35 million Series C funding round that will be used to develop additional software solutions .