September 4, 2018 Read More →

Surge in U.S. corporate green power buys seen spreading to Europe

Greentech Media:

European wind industry body WindEurope claims the region is on the verge of a corporate renewable energy power-purchase agreement (PPA) “revolution” as state subsidies tumble. A significant decline in in government-set feed-in tariffs is forcing previously reluctant investors to take PPAs seriously as a way to take projects to financial close, said the organization.

Strike prices for wind have fallen significantly across Europe in recent years. Onshore, for example, pricing has dropped from €117.10 (USD $137 at today’s rates) per megawatt-hour in Italy’s first auction, in 2013, to €65 ($76) in France this year, according to WindEurope. France is a relatively high-value market that has only just started to introduce auctions.

Offshore, meanwhile, the levelized revenue of electricity, including transmission costs at 2016 prices, has dropped from €156 ($182) per megawatt-hour for the U.K. Walney extension project in 2014 to €71 ($83) per megawatt-hour for the Baltic Eagle project in Germany this year.

The corporate PPA market, meanwhile, has been given a boost by recent changes to the European Union Renewable Energy Directive. The new directive instructs member states to identify and remove any administrative barriers to corporate PPAs for wind and solar.

Corporate renewable PPAs are already on the up. Volumes rose from 1.1 gigawatts to 1.4 gigawatts between 2016 and 2017.

In August this year, automotive giant Mercedes Benz signed a PPA to buy power for its manufacturing facility in Jawor, Poland from a 45-megawatt wind farm operated by VSB Energie Odnawialne Polska. The deal was the first corporate wind PPA in Poland and the first in Europe from an automotive sector player. And while corporate PPAs have so far been restricted to onshore wind, experts believe the trend could soon extend to offshore.

More: Europe on the cusp of a ‘corporate PPA revolution’

Comments are closed.