Report: PPA Prices Generally on the Rise

by | Feb 19, 2019

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LevelTen Energy has released its “Q4 2018 PPA Price Index,” showing solar prices generally rose across the board, while wind price movement was a “mixed bag.” The report looks at PPA price averages submitted through the LevelTen Energy Marketplace, representing more than 700 price offers across almost 400 projects, and found that they are — with a few exceptions — on the rise.

A few key takeaways from the report include:

  • An evenly weighted index of P25 prices across wind and solar for the five major markets covered rose $0.34/MWh, or 1.3%.
  • Solar prices rose moderately in most markets, with the notable exception of Southwest Power Project (SPP), where prices dropped substantially due to an influx of competitively priced projects at South Hub.
  • Wind price movement was a mixed bag, with prices rising in Midcontinent Independent System Operator(MISO), Electric Reliability Council of Texas (ERCOT) and PJM Interconnection and dropping in SPP and California Independent Service Operator (CAISO).
  • On a technology-blended basis, the SPP market dropped the most with both P25 and P50 prices down over $2/MWh, while the MISO market rose the most with P25 prices up $2.25/MWh and P50 prices up $0.2/MWh.

For the rise in solar prices in particular, the report notes that, historically, solar in SPP has not been particularly competitive compared to SPP wind or ERCOT wind and solar projects, so this is a notable change.

The report also notes that wind price movement varied, with prices rising in MISO, ERCOT and PJM, while dropping in SPP and CAISO.

Just last month, a report by BloombergNEF noted that corporations bought a record amount of clean energy through PPAs in 2018, shattering the previous record set in 2017. Highlights included a wave of smaller corporate energy buyers aggregating their purchases, and the first corporate clean energy power purchase agreements in markets such as Poland.

More than 60% of the global activity in 2018 occurred in the U.S., where companies signed PPAs to purchase 8.5GW of clean energy, nearly triple the amount signed in 2017. Facebook spearheaded a contingent of experienced U.S. corporate energy buyers, purchasing over 2.6GW of renewables globally in 2018, primarily with utilities in regulated U.S. markets through programs known as green tariffs. This was three times that of the next biggest corporate energy buyer, AT&T.

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