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Moderating inflation and reduced market volatility compared to 2022 and 2023 resulted in lower prices for renewable electricity in power purchase agreements across Europe.
During the third quarter of 2024, power purchase agreements (PPAs) for electricity sourced from renewable energy showed a 12.4% decline in price, compared to the same period of 2023, according to data from price tracking platform LevelTen cited by Reuters.
Corporate buyers and power users are increasingly looking to enter into PPAs with renewable energy developers to ensure the long-term supply of green energy.
“With current market conditions relatively stable, buyers may be wise to enter the market soon to secure the deals they need,” analysts at LevelTen wrote in the Q3 2024 quarterly report.
Moreover, there is a great variety of offers for potential PPA buyers. This “has perhaps never been greater,” LevelTen said.
Surging solar and wind electricity output displaced one-fifth of the European Union’s fossil-fuel power generation between 2019 and 2023, energy think tank Ember said earlier this year.
Capacity installations surged by 65% during that period, with wind power up by 31% to 219 gigawatts (GW) and solar capacity more than doubling to 257 GW, according to Ember’s report.
The strong growth of wind power installations since 2019 has led to an important milestone in the European Union-last year wind surpassed natural gas generation to become the EU’s second-largest source of electricity, Ember said.
This year, Europe has seen negative power prices due to the surge in renewable power generation.
European wholesale electricity markets have seen zero or negative power prices for the most hours on record this year amid soaring renewable energy generation and a mismatch between supply and demand hours for solar power. Zero or negative wholesale power prices have started to slow investment in capacity additions and make the case for the need for higher investment in energy storage, through which power producers would avoid curtailing electricity output or having to pay to offload electricity, according to a Reuters analysis.
