Finance, Sourcing Renewables  -  April 2, 2020

Spain and Sweden offer cheapest corporate RE in Europe, study finds

Sweden and Spain were found to have the cheapest average corporate PPA prices in Europe for wind and solar electricity in a new report released April 2 by BloombergNEF based on data from 25 players in the region’s clean energy market.

“1H 2020 European Corporate PPA Price Survey” found that the lowest price levels for onshore wind corporate PPAs in Europe can be found in Sweden at 30.50 EUR/MWh. While solar power is more expensive in the region compared to wind, the cheapest was found in Spain at 35.30 EUR/MWh.

“The very wide range of results was particularly interesting, with the gap between the cheapest PPA you might sign in Sweden and the most expensive PPA in the U.K. being over 30 euros per MWh,” Helen Dewhurst, an analyst at BloombergNEF and the author of the report, said in a statement. 

The study found that PPA prices generally fluctuate based on three main factors: capacity, term length and contract structure. The report finds that annual baseload contracts for round-the-clock power are between 1.5 and 3.5 euros per MWh more expensive on average than standard pay-as-produced deals that directly track renewable output. Additionally, a 1.5-2.5 EUR/MWh premium is typically charged for 15-20 year terms, compared with more standard 10-15 year terms in the U.S., the world’s largest corporate PPA market.

“Nearly half of the world’s RE100 companies are based in Europe – we know the demand for clean energy is there,” Kyle Harrison, a BNEF analyst specializing in corporate sustainability, added. “But for PPA activity to scale up to U.S. levels, more light needs to be shined on regional nuances around contract pricing, structure and term length.”

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