Reads over the weekend – Destroying the price tag threatens PV growth

From pv magazine 09/2021

Significant market fluctuations and risks jeopardize an investor’s appetite, which could jeopardize long-term solar energy. This has already been seen in California, with Karen Edson’s 2012 duck curve showing the connection between birth and interest. Already, the increase in renewable energy in the state’s energy market by up to 26% has reduced returns by about 30%.

Jenny Chase, head of solar at Bloomberg NF, believes that this fast-moving market sunshine and subsidy-free future risk is crucial for every market. “Extensive solar energy lowers energy costs, which can hit zero or even negative points in the sun,” says Chess. “This is not an imaginary problem, and it is not a marketing design problem – the only way to solve it is to change demand.

Michel Scolaro, senior analyst at Aurora Energy Research, agrees that eating meat is a threat to developers of subsidized free solar projects. Scholar told Real Estate Magazine: “Consumption of meat by nature has hit markets where business is strong.

PPA reduction

One obvious solution is energy purchases (PSPs). Under these terms, the risk is partially transferred to the host, which also facilitates the financing of the project. For renewable energy developers such as BayWa re, most of the corporate PPAs are subsidized, meaning the company is subject to market fluctuations.

Benedict Orman, head of international solar projects at Baywa Ray, said the ban and negative pricing were a concern. However, he noted that the normal market volatility is generally based on many variables at any time in the electricity market. The fact is, solar generators are “generators that generate the cheapest electricity.” Orman added that steps are already being taken to address these market challenges.

LevelTen Energy produces a P25 index that is updated quarterly on PPA prices. In the second quarter of this year, Spain received the first quarter of this year, showing that Spain is the fastest growing market in Europe. One of the three supplies on the market was for Spanish projects. On average, P.P. Changes in prices have sparked a recent discussion of human consumption. In the second quarter of 2021, according to the European Renewable PP. Prices were as stable as the previous settlements, but the Spanish P25 solar PPA supply prices fell 3.3% to 3.3 30.50 / MWh.

One of the most obvious reasons for the fall in project prices in Spain is a strong pipeline to the mature industry, as well as competition. Luis Lopez-Polin, Senior Business Development Manager at Level Ten Energy, said another reason is that a growing number of corporations are taking advantage of the Spanish market to compete in the Pan-European PPA.

Chase agrees that project life PPAs will provide a unique experience for the local market, but as it progresses, buyers are aware of potential price differences and are looking at short-term contracts around € 35 / MWh. “You have to be really optimistic about the balance of the investment,” he said.

However, not all news is bad. For example, Danish P25 solar PPA supply prices rose more than 14% in the second quarter. Nordic PAP supplier Alit “Hardver Overholm” said business-based solar investors could see this as a short-term concern. We are not experiencing this as a major investor in Northern Europe, and it is not the solar construction for the contractor that represents most of these markets in these markets.

The head of the European Bank’s Reconstruction and Development, Giorgios Giyaoris, on his part said that although the price of electricity has not yet been seen in the EBRD region, the bank will expect it to continue at low prices. “We expect the bond price to be lower than the average wholesale price,” he said. Our projects range in age from 20 to 25, so we take this into account.

Like all other hazards, price can be reversed. “It is important for developers to be aware of this risk,” Scolaro said. Inflation affects markets…

Limitations and negative pricing opportunities are already being built into project cash flow estimates. Mike Bameel, managing director of JLL Consulting, said all investors want the highest price for the lowest risk. When Bamel believes he has seen a drop in the sun, he hesitates to post a realistic picture of him. He emphasized the need for a long-term view of the growing pressure on the US market, given the growing risks of carbon and SSG among investors looking to maintain or improve their climate.

Sector linkage

According to Danes, CEO of Rebels Energy, solar energy should be viewed as a major component. “The sun is part of a larger image – the question is how to combine it with wind, batteries, AVS and so on,” he said.

The next solution to the problem of cannibalism is the key to saving money. “Cannabis occurs, and the result stays with us. “In the future, he said, we need to invest in innovative technologies designed to provide flexibility.” “We need to strengthen the sector, encourage renewable energy to respond to market signals, and encourage consumers to avoid overeating.”

The modern grid with storage can allow demand shift and aggregation, it can be the conversion of integrated projects from delicacy, water management, agriculture, local supplies to AVs and more.

Ortman is confident that the market will respond to quality. In terms of environmental impact, sustainability and cost, he believes the sun still hits options. Batteries are a high cap for solar projects, such as BayWa re, so even if you do not intend to integrate storage right away, you should already apply for battery licenses with plants.

He said integration in many markets should focus on balance, system balance and governance. However, when it comes to artificial consumption, the market wants to look at new business models and explorations based on how solar plants are paid, storage, carbon costs, and potential changes in system prices.

This is important because the demand for value and value is being re-evaluated in many areas beyond the effects of carbon. The New York State Energy Research and Development Authority, for example, has already developed policies to take into account social benefits such as fresh air. This will play a role in the consumer market rather than the wholesale market and will be especially important as the sun rises in the United States. The Federal Energy Information Administration’s long-term plan is for 45 GW solar, with 50% of new capacity increases. Continuing the local PTC will also benefit long-term stable U.S. solar growth.

Control hazards play a big role in the solar market, and the biggest risk is a change of mindset. “Although the forces that make the necessary changes are challenging, there is general pressure to act,” Bamel said. He added that regulatory risk is simply one of the many market hazards, and that new or renewed government support in the regions should take more into account for climate change needs.

While there are reasonable concerns about artificial eating, Orman said, these are the challenges of a mature market. Identifying and addressing market risk is a positive and important step. Carbon prices are already playing a significant role in the growth of solar panels, and the days when green certificates and electricity are sold separately seem to be far from over.

No matter what happens, he believes that LevelTen Lopez-Polyn’s governments and the sector will find a way to continue their emissions, as there is a lot of focus on decarbonation. We are witnessing a fundamental change in the market: Corporate PPAs have been signed because of long-term sustainability targets and whether human consumption will still have a significant impact.

Chase, for his part, warns investors today to be optimistic about financially supporting the sun – “We all need to be optimistic about our future.”

By Felicia Jackson

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