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Renewable Energy Prices Soar 30%

Renewable Energy Prices Soar 30%

The price of electricity generated from renewable energy sources in North America has added nearly 30 percent over the past year due to rapidly rising development costs coupled with increased demand.

This is the summary of a report by LevelTen Energy, the operator of the world’s largest PPA market and a leading provider of infrastructure for renewable energy transactions.

“North American renewable energy developers are struggling to build solar and wind projects fast enough to keep up with demand due to an extremely challenging development landscape this quarter,” the report’s authors said.

“This is leading to a lack of power purchase agreements for companies and other large energy purchasers, which are critical to bringing new clean energy projects online and meeting corporate and net federal goals,” they explained.

This combination of developments has led to a 9.7 percent quarter-on-quarter increase in PPA prices to nearly $40 per megawatt-hour, and a year-on-year increase of 28.5 percent.

“Every aspect of project development has risks to assess and balance,” said Gia Clark, Senior Director of Developer Services at LevelTen Energy, in the report’s press release.

These days, these seem especially risky. Developers must consider these complexities and uncertainties in PPA offerings to protect the success of their project, as well as the long-term financial security of their business. As long as these myriad headwinds persist, we can expect PPA prices to rise across North America.”

At a recent industry event, wind power developers complained that they had to downsize amid an increasingly unfavorable business environment.

“The state of the supply chain is ultimately unhealthy right now,” said Sherry Hickok, CEO of GE Onshore Winds. It’s unhealthy because we have an inflationary market that’s way beyond what anyone expected until last year. Steel rises three times. She added that it’s really ridiculous to think about how supply chain sustainability is in a growing industry with this kind of pressure.”

By Charles Kennedy for Oilprice.com

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