Belgium, (Brussels Morning Newspaper) Growth of renewable power prices continues to pick up pace according to power purchase agreements (PPAs) tracked by LevelTen Energy.
The data shows that renewable power contract prices have increased roughly 27.5% in Europe and about 28.5% in North America last year, Reuters reports Wednesday.
Developers pointed out that prices are rising partly due to soaring inflation, which is pushing up prices of parts, shipping, labour and other costs.
In the first quarter of 2022, renewable power prices rose 8.6% in Europe and 9.7% in North America. The trend has reversed in the last two years or so, after a decade of declining prices of renewables.
The demand for renewables in Europe is rising as EU authorities and national governments try to lower their dependence on Russian energy imports.
Graham Price, an analyst at Raymond James investment bank, pointed out that the EU’s aggressive environmental policies coupled with rising cost of renewables should increase the appeal of more expensive technologies like biofuels and green hydrogen there.
Oscar Pérez, a partner at Q-Energy renewable energy developer, noted that the war in Ukraine was “the last straw for a market where there was already a lot of price tension.”
Soaring prices have not affected demand thus far, LevelTen noted and stressed that, according to a poll of energy and sustainability advisers, roughly 75% of respondents see no decline of procurement plans.
Luigi Sacco, head of PPA origination at Italian Falck Renewables, stressed “It’s not about demand… demand is there but supply is struggling a bit in several markets.”
He pointed out that the soaring fossil fuel prices are the main drivers of demand for renewable energy.
US Silicon Ranch renewable energy developer CEO Reagan Farr warned that the company has “intractable problems right now with our supply chain.”
“The ready alternative to renewable generation right now is gas, and gas prices are up 100% as well,” he pointed out and concluded “so you pick your poison.”
An aggravating factor in the US is uncertainty about the government’s plan to extend tax breaks for renewables and the possibility of tariffs on solar panels imported from Asia.