European renewable PPA prices showed remarkable stability in the first quarter of 2021, according to new research.
The LevelTen Energy’s Q1 2021 PPA Price Index found that the blended P25 – the most competitive 25th percentile wind and solar PPA offer prices – rose just 0.1% quarter over quarter.
The Index series analyses over 4,000 wind and solar pricing offers listed on the LevelTen Marketplace across 21 countries in Europe and North America.
According to the analysis European P25 solar prices increased by just 0.3%, and P25 wind prices dropped by 0.1% in Q1 2021.
Spain continues to be a red-hot solar market, with Spanish P25 solar prices falling by 2.6% in Q1, following a 5.2% drop in the previous quarter.
Only France and the UK saw notable changes to the P25 wind prices.
In France, wind PPA prices dropped for a second straight quarter, decreasing by 5.5%, and in the UK, prices rose by 4.3% from last quarter.
Furthermore, Ireland made its debut on the Index with wind PPA prices averaging €66/MWh.
In addition, while Italy and Spain retained the top spots in terms of percentage of offers on LevelTen’s European Marketplace, the UK surpassed Germany to take third place, becoming Europe’s third-largest market.
LevelTen Energy vice president of Europe Flemming Sørensen said: “Pricing in mature wind markets are more or less flat quarter-on-quarter, and we continue to see Nordic markets offering the lowest wind PPA prices.
“We have seen new PPA offers in Europe from zero subsidy offshore wind, which is a trend that we expect to only gain momentum over time.
“The story for solar is similar with the Nordic countries continuing to offer some of the lowest solar prices in Europe.
“That said, the solar pipeline in Spain is enormous, making the market both deeper and more liquid than other markets in Europe, giving it a competitive edge.”
Speaking on the inclusion of Irish PPA price data in the Index for the first time, Sørensen added:
“In Ireland, corporate PPAs should be an attractive alternative for developers as a route to market without the need for a government subsidy, for both onshore wind and solar.
“If this is possible in Denmark and Sweden, it is also possible in Ireland, but it will only happen when the gap between what corporates are willing to pay and what an auction award will pay has diminished.
“Increased transparency and visibility into actual financial implications of an auction award will help achieve that, and larger volumes will help get there quicker.”
BloombergNEF senior associate Kyle Harrison added: “Despite the low percentage of offers from developers, Poland is a European corporate PPA market on the up and up.
“Rising carbon prices from the EU Emissions Trading Scheme are boosting power prices and improving the cost-competitiveness of clean energy.
“Corporations announced over 200MW of corporate PPAs in Poland in the first quarter of 2021.”