AleaSoft Energy Forecasting, October 31, 2024. In the AleaSoft webinar with the participation of Deloitte, it was highlighted that PPA continue to be fundamental to guarantee the economic viability of renewable energy projects in the coming years. In addition, the importance of boosting the hybridisation of renewable energies with battery storage to optimise the profitability of these projects was underlined.
The 48th edition of the monthly webinar series of AleaSoft Energy Forecasting was held on October 17. On this occasion, in addition to the usual analysis of the evolution of energy markets in Europe in recent weeks and the prospects for the coming months, speakers from Deloitte participated, for the fifth time since these webinars began to be held, who analysed the current situation of renewable energy project financing, the prospects for batteries and hybridisation, as well as the financial and accounting implications of PPA.
Renewable energy project financing
The five‑year period now coming to an end has been marked by an unprecedented development of renewable energies, especially solar photovoltaic energy, demonstrating that these projects are viable and profitable without the need for subsidies. However, this new context has generated new uncertainties, such as the risk of curtailments, price cannibalisation and high market volatility; factors that threaten the financing of future renewable energy projects. This situation has highlighted the need to boost energy storage with batteries and its integration with renewable energies. Moreover, the context is very favourable, as batteries have experienced significant reductions in prices, which have almost halved in the last year.
In the project finance field, few banks are currently willing to finance full merchant projects, and those that do it apply very conservative criteria. For this reason, PPA remain a key tool for securing renewable energy project financing. At current market prices and conditions, PPA offer a slightly lower IRR than 100% merchant projects, but with the advantage of being more robust and providing greater stability with lower risk.
New trends in PPA
As for the trends observed among offtakers currently signing PPA, although technology companies continue to account for the largest volume of energy traded through this kind of agreements globally, more and more sectors are turning to PPA. Industrial large and electricity‑intensive consumers, such as mining, metallurgical and chemical companies, are gaining ground, and the industrial consumer is beginning to lead the way in signing PPA in many countries.
In the coming years, the development of renewable energy will depend on market evolution, auctions and progress in energy storage technologies.
AleaSoft Energy Forecasting’s analysis on the prospects for energy markets in Europe, batteries, hybridisation and energy storage
The next webinar of AleaSoft Energy Forecasting, the 49th, will take place on November 14 and will focus again on the prospects for batteries, hybridisation and energy storage, given the importance of these vectors of the energy transition in the coming years. On this occasion, the webinar will feature the participation of Luis Marquina de Soto, president of AEPIBAL, the Business Association of Batteries and Energy Storage. In addition, there will be the usual analysis of the evolution and prospects of European energy markets.
Source: AleaSoft Energy Forecasting.
