Each quarter, the LevelTen Energy PPA Price Index reports the prices that wind and solar project developers have offered for power purchase agreements (PPAs) available on the LevelTen Marketplace, the world’s largest marketplace of North American and European PPA pricing offers. LevelTen has been tracking PPA prices in North America since Q2 2018: this is LevelTen’s first PPA Price Index for Europe.
The offers underlying our Index are from projects that are currently under development and posted to the LevelTen Marketplace, giving renewable energy buyers and developers a transparent and unprecedented look at actual PPA price offers — not estimates of what PPA prices could or should be.
To maintain project anonymity, the prices are aggregated and reported as an Index. The P25 Index represents the boundary that defines offers in the lowest 25th percentile, providing insight into the most attractive PPA offers available to renewable energy buyers.
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.
- The average term length for wind PPAs was 10.8 years, and for solar it was 11.2 years.