Prices for green power purchase contracts in Europe fell 12.4% in the third quarter compared to the same period in 2023, price tracking platform LevelTen said on Thursday.
She cited factors such as falling inflation and market volatility following the COVID-19 pandemic and the 2022 energy crisis.
“With current market conditions relatively stable, it would be wise for buyers to enter the market quickly to secure the contracts they need,” LevelTen said in its quarterly report.
“The variety of purchasing opportunities available to potential PPA buyers has perhaps never been greater,” she added.
PPAs are long-term agreements between electricity user companies and developers of solar and wind projects. They provide supply guarantees for suppliers who must meet a European Union (EU) regulatory requirement that at least 42.5% of electricity must come from renewable sources by 2030.
For developers, PPAs guarantee a revenue stream, which makes it easier to arrange financing.
The impact of these cheaper contracts on ordinary domestic consumers is unclear, although policymakers say increasing green energy will ultimately reduce costs.
LevelTen said the period saw a significant gap between regions, with an expansion of projects in Central and Eastern Europe, as well as an increase in solar projects in Ireland.
Supply chain issues and inflation have hampered the wind sector, and Belgium, France, Greece, Ireland, Italy and Portugal did not contribute to third-quarter prices for the LevelTen index.
The most competitive 25% of PPA prices for new capacity built between July and September in 22 European countries in a market index average fell to 76.17 euros ($82.97) per megawatt hour (MWh), from 86.94 euros a year earlier.
They fell by 1.3% compared to 77.21 euros in the second quarter of 2024.
In the blended index for wind and solar, solar showed a 1.3% quarter-on-quarter increase, which LevelTen attributed to increased Hungarian and Italian prices, as well as newly added Irish prices.
He said falling interest rates should make it easier to finance renewable projects, and the appetite for development had also been boosted by signs of positive political will in Britain, and by wind capacity auctions. of the German government.
The duration of the PPAs it offers is generally 11 years. Prices are set relative to hourly wholesale market prices over a one-day horizon[EL/DE].
(1 $ = 0,9180 euros)
