Q3 2021 PPA Price Index

Q3 2021 PPA Price Index

October 14, 2021

LevelTen’s Q3 2021 PPA Price Index Shows Rising Renewable PPA Prices Across North American and European Markets

Today, LevelTen Energy released its Q3 2021 PPA Price Index Reports for North America and Europe, delivering the industry’s most comprehensive analysis of actual power purchase agreement (PPA) price offers on the LevelTen Energy Marketplace. Here are a few highlights from each report.

North American PPA Prices Continue Rising as Developers Confront Myriad Challenges

As demand for renewable energy continues to reach record levels, North American project developers are confronting a barrage of headwinds ranging from regulatory uncertainty to a global supply chain squeeze. These dynamics are slowing development timelines and making it difficult for renewable supply to keep pace with unprecedented demand. Consequently, LevelTen’s Overall National PPA Price Index rose by 5.4% during Q3, and 19.1% year-over-year.

In addition to rising commodity prices and supply chain issues, congested interconnection queues and permitting delays are adding complexity to PPA negotiations and making it more challenging for developers to accurately assess project timelines and costs. “Though this is a highly competitive market, we know that many buyers still need to procure to hit renewable energy deadlines that are right around the corner,” said Rob Collier, VP of Developer Solutions at LevelTen Energy.

Following reports in Q2 of human rights abuses in the solar supply chain in China’s Xinjiang province, solar developers have needed to adjust their supply chains during Q3 in an already tight PV component market. As a result of these pressures, in Q3, the North American National P25 Index for solar prices rose by 4.1%.

North American wind prices continued rising in Q3. The National P25 PPA Price Index for wind offers rose by 6% during Q3.

To download the full North American report, including PPA prices by ISO and hub.

Energy Crisis Disrupts European PPA Price Stability

European renewable PPA offer prices spiked during Q3 2021. Supply chain constraints and permitting issues have converged with Europe’s crisis of skyrocketing wholesale electricity prices to put upward pressure on PPA offer prices.

PPA prices in the UK and Germany have been hit particularly hard. In Spain, several consecutive quarters of PPA price decreases may have finally come to a halt. “As part of an effort to keep wholesale prices down, the Spanish Government has introduced a new Royal Decree that caps the profits renewable generators can make,” said Frederico Carita, Manager of Developer Services - Europe, LevelTen Energy.

In Italy, solar PPA P25 offer prices remained flat during Q3, but the country’s onerous permitting processes are causing its robust solar sector’s project pipeline to shrink.

Danish solar prices have increased substantially year-over-year, partly due to price adjustments to electricity flowing in from Germany’s high-priced wholesale market.

To download the full European report, including PPA prices by country.

Beginning with the Q1 2022 PPA Price Index Reports, we have expanded these reports to provide you: