(Credit: Pexels)Wind prices in the US dropped by 6.2% in the first quarter of the year, after four quarters of strong rising trends, according to LevelTen Energy’s new PPA Price Index. “For the past few years, wind prices as a whole have been rising, and they increased significantly in 2020,” says Rob Collier, VP of developer relations for LevelTen Energy. “The extension of renewable Production Tax Credits (PTC) in December 2020 appears to have tapered that increase. Time will tell if the continuation of such policies will create a stabilizing effect on North American wind prices.”
Meanwhile, solar prices continued to rise, climbing by an average of 15% year-over-year. In the first quarter, solar prices rose an average of 2.6% to $31.36 per megawatt hour compared to the last quarter of 2020.
US renewable energy markets displayed resilience in the face of the economic shocks of 2020, and have become more competitive as corporate PPA demand continues to increase, leading to rising PPA prices, according to the report.
Corporate preferences continue to play an even bigger role in shaping the trajectory of the renewable industry. In LevelTen’s survey of developers with projects on the LevelTen Marketplace, 68% of respondents answered “yes” when asked if their organization was working to improve its practices and tracking related to social and environmental justice as a result of PPA offtaker preferences.
“We’re seeing a rapid rise in corporate offtakers incorporating environmental and social justice preferences — and even requirements — into their RFP processes. The majority of developers are beginning to rise to this challenge and looking into their internal practices, and those of their supply chain partners, to increase transparency and promote equity throughout various aspects of project development,” Collier told Environment + Energy Leader.
In Europe, renewable PPA prices displayed remarkable stability in the first quarter. The Blended P25 (25 percentile) Index for offers on LevelTen’s European Marketplace increased by only 0.1% quarter over quarter, with P25 solar prices increasing by 0.3%, and P25 wind prices dropping by 0.1% in Q1 2021. As a whole, European PPA prices are remaining quite level, the report shows.
