Electricity

Renewable energy prices rebounded 10% after collapse in March

renewable energy electricity prices

Photo: Pixabay

Published

April 15, 2020

Country

Comments

0

Share

Published:

April 15, 2020

Country:

Comments:

0

Share

Renewable energy prices across Europe have recovered after a 15-30% fall in March and rebounded 10% in April.

Prices took a substantial hit at the beginning of March, falling between 15-30% across key markets compared to average prices in February, but have largely recovered from March lows, said Pexapark, the provider of advisory services for clean energy Power Purchase Agreements (PPAs).

Prices were EUR 38.78 per MWh on February 18 and EUR 32.88 on March 23

While this is good news, the episode has pointed to the importance of risk management for the renewable energy sector, the company added.

Prices have recovered from EUR 32.88 to EUR 36.36 as of April 9

Pexapark’s composite European index which tracks the evolution of PPAs prices across all relevant European markets, shows that the prices were EUR 38.78 per MWh on February 18 and only EUR 32.88 per MWh on March 23.

The Pexa Euro Composite tracks how the average price or European renewable energy varies over time

After that prices have recovered from EUR 32.88 to EUR 36.36 per MWh as of April 9, or around 10%. However, they remain below levels seen late last year – more than EUR 42.

As such, many developers and investors are placing PPAs on hold, as the market conditions make any deal financially unviable, Pexapark said.

The disruption in the market is unlikely to persist for long

The company’s price indices show that the severity of price shock from COVID-19 exceeds what was experienced during previous crises, such as that around the 2011 Fukushima Daiichi nuclear disaster.

Renewable energy players will need to adopt more robust risk management techniques used by trading companies

In addition to this short-term fall in price, COVID-19 has also led to very high levels of volatility in the market. However, the disruption in the market is unlikely to persist for long.

“PPAs can act as a strategic prerequisite to be successful in non-subsidy renewable investment and especially in times of price volatility. To successfully navigate turmoil as we experience it currently, renewable energy players will need to adopt more robust risk management techniques used by trading companies, such as maintaining the ability to quickly sell large energy positions and act flexibly upon price movements,” said Luca Pedretti, COO of Pexapark.

Comments (0)

Be the first one to comment on this article.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

Slovenia and Czech Republic to exit coal by 2033

Slovenia, Czech Republic to exit coal by 2033

14 January 2022 - The Government of Slovenia adopted the National Strategy for a Coal Exit and the Restructuring...

iea electricity report 2022 prices

IEA: Rising demand for electricity could result in high prices over next three years

14 January 2022 - Average wholesale electricity prices in Europe in the fourth quarter of 2021 were more than four times as high as their 2015-2020 average

Western Balkans integrate markets easier energy transition funding

Western Balkans need to integrate markets for easier energy transition, funding

14 January 2022 - A joint approach makes funding green energy and the coal phaseout easier for the Western Balkans, but funding sources are still insufficient

Albania to lease oil-fired power plant with installed capacity 110-130 MW

Albania to lease oil-fired power plant as a response to energy emergency

14 January 2022 - State-owned power utility KESH issued the call for expression of interest for leasing a thermal power generation asset