Check out Europe’s Top Markets for Renewable PPAs
With just a few weeks till RE-Source 2018, Europe’s leading corporate renewable energy event, let’s break down the leading markets in Europe for Corporate Renewable PPAs.
2018 is set to be a landmark year: 7.2 GW worth of global corporate renewable PPAs have already been signed year-to-date.
Recently RE100 member Schneider Electric looked at some of the current top countries for PPAs in Europe. Here are the key take-aways:
Spain
- Spain is a clear target market thanks to cost-competitive renewables and flexible contract structures. Renewable PPAs are a cost-effective way to ensure stable energy prices and achieve carbon-reduction goals.
- Available PPA options include both direct (sleeved) and virtual (synthetic) deals. These can be structured both with traditional fixed prices and market-following structures.
The UK & Ireland
- Direct (sleeved) PPAs have, until recently, been the norm in the UK. However, virtual (synthetic) deals are becoming more economically attractive thanks to the increasing competitiveness of renewables.
- While Ireland has suffered in terms of delays in its energy market reform, there have been significant deals there with IKEA, Facebook and Microsoft. The country’s rich wind resources and track record for C&I renewable PPAs make Ireland a source of clean energy.
Belgium and the Netherlands
- In Belgium, offshore wind farm developers are keen on the potential for corporate offtake, whether via direct (sleeved) or virtual (synthetic) deals.
- In the Netherlands, supply issues around guarantees of origin (GOs) have caused a spike in price (almost double in the past 12-18 months). Renewable PPAs are an effective way to ensure GO availability at a stable price for companies who have long-term renewable and carbon reduction goals.
Poland
- The main opportunity in Poland is for virtual (synthetic) PPAs.
- Buyers entering the Polish market can potentially stake a leadership claim because PPAs there have an outsized impact compared to PPAs in other markets (a result Poland’s fossil fuel-heavy grid).
- With significant increases in energy prices in 2018 compared to 2017, the economic returns on offers in Poland are also improving.
The future for PPAs in Europe looks bright: recent changes to the EU’s Renewable Energy Directive stipulate that Member States across Europe should identify – and remove – any administrative barriers to corporate renewable PPAs for wind and solar. There has also been a significant decline of government-set feed-in tariffs, which is forcing previously reluctant investors to take PPAs seriously as a clear way to take projects to financial close.
All of which means that PPAs could be set to grow massively across the continent. This time next year, we could be seeing major changes in the countries leading the charge for European PPAs.
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