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BlogMarket Insights

LevelTen Releases Q2 2020 PPA Price Index, Including the First Price Index of Transactable European PPA Offers

Market Insights
July 27, 2020
by 
LevelTen Energy
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Two years ago, we launched the LevelTen PPA Price Index, the first (and only) index of actual power purchase agreement (PPA) price offers for renewable energy projects under development in North America. The report brought an unprecedented level of clarity to the market, and quickly became a must-read for renewable energy buyers and developers each quarter. Today, we’re pleased to announce that LevelTen is again bringing that same level of innovation and transparency to the European market with the launch of our first European PPA Price Index. Rather than historical RFP pricing, or industry estimates, this report will provide the industry’s most comprehensive analysis of actual, transactable PPA price offers in Europe. You can read more about our first report in the press release.

We’ll be publishing the LevelTen European PPA Price Index alongside our North American report every quarter. To download the full reports for Q2 2020, fill out the forms below.

Here are a few highlights from each:

LevelTen European PPA Price Index Key Takeaways

  • Spain and the United Kingdom had the highest proportion of projects with PPA offers of the 14 countries included in this quarter’s report, at 26% and 14% of the total, respectively. There are many reasons why Spain is an active market, including resource availability (plenty of sun), the availability and cost of land, trust in the regulatory environment and subsidy schemes, as well as low construction costs.
  • The 25th percentile (P25) pan-European Index price was €38/MWh for solar and €31/MWh for wind. This quarter’s report sets a baseline: In future reports LevelTen will track the percentage that the Indices change over time. There was significant variation of the wind and solar indices among countries, which can be attributed to factors like regulatory conditions, commercial operation date (COD) ranges, and regional differences in resource availability and development costs.
  • Wind PPAs had a wider range of offer prices than solar. Looking at the range between the P10 (lowest percentile) and P90 (highest percentile) offer prices, wind PPAs had nearly double the spread at €40,33/MWh versus €21,90/MWh for solar.
  • According to a survey of developers included in the report, a significant  majority – 67% – felt that the European Commission’s “Next Generation EU” fund would have no impact on corporate PPA activity.

Download the full European report:

LevelTen North American PPA Price Index Key Takeaways

  • Quarter-over-quarter, across markets, an evenly weighted index of P25 wind and solar prices increased $0.70 per megawatt hour (MWh), or 2.6%.
  • Year-over-year, the P25 solar index increased 3.1%, while wind increased 13.5%, reflecting significant increases in CAISO and PJM.
  • Changes in Q2 2020 were variable across regions and technology. For example, for wind,  PJM showed large increases, while other regions like SPP and MISO decreased. For solar, the increase in CAISO and SPP outweighed the decrease in MISO.
  • FERC’s Minimum Offer Price Rule in PJM has appeared to have minimal effect on prices; solar PPA prices have remained steady in Q1 and Q2 of 2020. According to a survey of renewable energy developers included in the report, 30% of developers with projects in PJM said they were offering PPA prices, but the final terms were conditioned on more regulatory certainty. According to Wood Mackenzie: “FERC’s December MOPR has caused a great deal of uncertainty in the PJM market, and the July decision to uphold the MOPR is likely to keep uncertainty as the status quo. Despite this, Wood Mackenzie believes the MOPR will not have massive negative impacts on renewables and expects PJM utility PV annual capacity additions of 1.0 GWdc or more 2023 onward. This pace of capacity additions is driven by favorable solar economics and increasingly aggressive climate goals, especially in Virginia, which just set a target of 100% carbon-free electricity by 2050 that was followed by Dominion’s GW-scale RFP.”
  • According to the survey, COVID-19 impacted renewable energy developers in many ways, with “project development,” “construction,” “equipment procurement” and “energy marketing” being impacted the most.

Download the full North American Report:

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

  • More PPA price data (P10, P25, P50, P75, P90) to give you a better picture of what a competitive offer looks like (both reports)
  • Projected capture price trend to help you understand how forward markets have changed (North America report)
  • Price changes by country and technology (Europe report)
  • Expanded expert analysis and much more (both reports)

Click here to learn more about the data and market intel included in the expanded PPA Price Index Reports.

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PPA Price Index
Market Analysis
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LevelTen Energy

LevelTen Energy is the leading provider of renewable transaction infrastructure, delivering the marketplaces, software, automated analytics, and expertise required to accelerate clean energy transactions. The LevelTen Platform is the world’s largest online hub for renewable energy buyers, sellers, advisors, asset owners and financiers. The Platform includes the LevelTen Energy Marketplace, which delivers access to more than 4,500 power purchase agreement price offers spanning 28 countries in North America and Europe. It also includes the LevelTen Asset Marketplace, which brings together over 800 renewable energy project developers and owners, and delivers the online tools and expertise they need to buy, sell and finance assets quickly. Together, LevelTen and its partners share #OneGoal to accelerate the energy transition.

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LevelTen Energy, Inc. and its affiliates (“LevelTen”) provides a renewable energy marketplace and platform comprising certain proprietary software, data analytics, contract templates, and related tools and processes, to aggregate renewable energy buyers and sellers, allowing the parties to connect and transact efficiently (the “LevelTen Platform”). LevelTen is a commodity trading advisor (CTA) registered with the Commodity Futures Trading Commission (CFTC) and is a Member of the National Futures Association (NFA). The information contained herein is provided for general informational purposes only and does not constitute investment advice regarding the value of or advisability of entering into any particular renewable energy transaction. Renewable energy transactions involve substantial risk of loss, and parties are strongly advised to consult with professional and legal advisors prior to entering into any given transaction. Access to or use of the information contained herein does not establish a “client” or “customer” relationship with LevelTen within the meaning of any applicable laws or regulations. The LevelTen Platform is not designed or intended to allow users to place orders or enter into self-executing transactions within the Platform, and the offer, acceptance and contracting process for all transactions shall take place directly between buyer and seller, in their sole discretion, with the LevelTen Platform merely providing tools and information to help facilitate such transactions.

LevelTen’s Asset Marketplace software platform and services may provide certain data, analytics, and information regarding renewable energy projects to assist parties in evaluating asset transactions; however, LevelTen expressly does not provide users with any investment advice or make personal recommendations as to whether or not to enter into any particular transaction, and all transaction decisions shall be made by the user, in its sole discretion.  Moreover, the LevelTen platform is not designed or intended to allow users to place orders or enter into self-executing transactions within the platform, and the offer, acceptance and contracting process for all transactions shall take place directly between buyer and seller, with the LevelTen platform merely providing tools and information to help facilitate such transactions.  Where applicable, LevelTen is acting in the limited capacity of an “M&A Broker” within the meaning of a “no-action” letter dated January 31, 2014 issued by the Securities and Exchange Commission (“SEC”) in providing services related to the Asset Marketplace software platform and has not registered as broker or a dealer under the Securities Exchange Act of 1934.