PPAs from niche to standard

10/18/18, 11:04 AM -

Subsidy-free photovoltaic and wind projects can achieve a market share of over 25% in 2030 and more than 50% of total installations by 2040.

Power purchase agreements (PPAs) will become one of the market standards within the next years.
Power purchase agreements (PPAs) will become one of the market standards within the next years.

After years of plummeting prices, European power markets are on the rise again. Decreasing cost of renewables spur the interest in subsidy-free renewables financed by long-term power purchase agreements (PPAs).

30% share in 2030 - 40 % in 2040

Based on Enervis’ central scenario of its European power market outlook, subsidy-free PV and wind will reach a share of more than 25 % in 2030 and above 50% in 2040. These projects could be financed based on PPAs. Investors need to keep in mind though, that additional renewable capacity will partially cannibalize revenues for other projects (“cannibalization effect”). Investors therefore should conduct careful market analysis.

PPAs as one of the market standards

Study author Tim Steinert from consultancy Enervis explains: “Our models show that by the mid-2020s PPAs can become one of the market standards for financing new projects. Market players who gain experience in building and financing PPA backed renewable projects quickly are one step ahead in the race for market shares in a subsidy-free environment.” (HCN)

View the Enervis-PPA-Factsheet here.

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