logo
Article

Global renewable power prices soar on heavy demand, chaotic supply chain

Reuters|Nichola Groom and Isla Binnie|April 13, 2022
USAEuropeJobs and Economy

Prices for wind and solar power in major global markets have climbed nearly 30% in a year as developers have struggled with chaotic supply chains and surging costs for everything from shipping to parts to labor, according to a report published on Wednesday.

Contract prices for renewables jumped 28.5% in North America and 27.5% in Europe in the last year, according to a quarterly index by LevelTen Energy that tracks the deals, known in the industry as power purchase agreements (PPAs).

In the first quarter alone, prices rose 9.7% in North America and 8.6% in Europe, LevelTen said.

Economic, logistical and labor market disruptions during the coronavirus pandemic have worsened since the Russian invasion of Ukraine, reversing a decade of cost declines for the renewable energy sector.

There is a risk higher costs could slow demand growth at a time when the United Nations has called for clean energy to expand more rapidly to avoid the worst effects of a warming climate.

"We still need keep the foot ... more [truncated due to possible copyright]

     

Prices for wind and solar power in major global markets have climbed nearly 30% in a year as developers have struggled with chaotic supply chains and surging costs for everything from shipping to parts to labor, according to a report published on Wednesday.

Contract prices for renewables jumped 28.5% in North America and 27.5% in Europe in the last year, according to a quarterly index by LevelTen Energy that tracks the deals, known in the industry as power purchase agreements (PPAs).

In the first quarter alone, prices rose 9.7% in North America and 8.6% in Europe, LevelTen said.

Economic, logistical and labor market disruptions during the coronavirus pandemic have worsened since the Russian invasion of Ukraine, reversing a decade of cost declines for the renewable energy sector.

There is a risk higher costs could slow demand growth at a time when the United Nations has called for clean energy to expand more rapidly to avoid the worst effects of a warming climate.

"We still need keep the foot on the gas here," Rob Collier, vice president of LevelTen's energy marketplace, said in an interview.

Aggravating challenges in North America, the sector is uncertain whether U.S. lawmakers will extend tax breaks for renewable energy facilities, part of President Joe Biden's climate change agenda. Developers also are worried about a U.S. Commerce Department investigation initiated this year that could result in tariffs on solar panel imports from Asia, pushing up costs.

"There's just intractable problems right now with our supply chain," Reagan Farr, chief executive of U.S. solar developer Silicon Ranch, said in an interview.

In Europe, the war in Ukraine has led governments to try to reduce dependence on natural gas from Russia, further boosting robust demand for renewables.

The war has been "the last straw for a market where there was already a lot of price tension," Oscar Perez, a partner at Spain-based fund manager and renewable energy developer Q-Energy, said in an interview.

Higher costs for renewables in Europe, along with the continent's aggressive climate policies, should boost the appeal of pricier technologies like green hydrogen and biofuels, according to Raymond James analyst Graham Price.

For now, soaring prices have not slowed demand, LevelTen said. In a poll the company conducted of 21 sustainability and energy advisers, 75% said their clients have accelerated or maintained procurement plans, according to the report.

"It's not about demand," Luigi Sacco, head of PPA origination at Milan-based Falck Renewables, said. "Demand is there but supply is struggling a bit in several markets."

One factor luring buyers to renewables is the soaring cost of fossil fuels.

"The ready alternative to renewable generation right now is gas, and gas prices are up 100% as well," Farr said. "So you pick your poison."

Register now for FREE unlimited access to Reuters.com

Reporting by Nichola Groom in Los Angeles and Isla Binnie in Madrid; Editing by David Gregorio
Our Standards: The Thomson Reuters Trust Principles.

More from Reuters
My View Business

 

 

 


Power Up
Subscribe to our energy newsletter to get the latest news affecting the global energy industry.


Daily Briefing
Subscribe to our newsletter to get all the news you need to start your day.


Energy
Russian Deputy PM says several buyers agree to pay in roubles for Russian gas, article with image
Energy · April 15, 2022 · 7:26 AM EDT
Several buyers of Russian gas have agreed to switch to payments in roubles, Russian Deputy Prime Minister Alexander Novak said on Friday.

Energy
Oil rises on news EU may phase in a ban on Russian oil imports, article with image
April 14, 2022
Energy
Germans should save energy to put pressure on Russia - minister, article with image
April 14, 2022
Energy
Enel to accelerate growth in Brazil's renewable energy, article with gallery
April 14, 2022
Energy
Analysis: Biden plan to aid Europe with LNG poses risk to US climate goals, article with image
April 14, 2022
Site Index
Latest
Home
Browse
World
Business
Legal
Markets
Breakingviews
Technology
Investigations
Lifestyle
Media
Videos
Pictures
Graphics
About Reuters
About Reuters
Careers
Reuters News Agency
Brand Attribution Guidelines
Reuters Leadership
Reuters Fact Check
Reuters Diversity Report
Stay Informed
Download the App
Newsletters
Information you can trust
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.

Follow Us
Thomson Reuters Products
Westlaw
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.

Onesource
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.

Checkpoint
The industry leader for online information for tax, accounting and finance professionals.

Refinitiv Products
Refinitiv Workspace
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.

Refinitiv Data Catalogue
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.

Refinitiv World-Check
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.

Advertise With Us
Advertising Guidelines
Cookies
Terms of Use
Privacy
Digital Accessibility
Corrections
Site Feedback
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.

© 2022 Reuters. All rights reserved


Source:https://www.reuters.com/busin…

Share this post
Follow Us
RSS:XMLAtomJSON
Donate
Stay Updated

We respect your privacy and never share your contact information. | LEGAL NOTICES

Contact Us

WindAction.org
Lisa Linowes, Executive Director
phone: 603.838.6588

Email contact

General Copyright Statement: Most of the sourced material posted to WindAction.org is posted according to the Fair Use doctrine of copyright law for non-commercial news reporting, education and discussion purposes. Some articles we only show excerpts, and provide links to the original published material. Any article will be removed by request from copyright owner, please send takedown requests to: info@windaction.org

© 2022 INDUSTRIAL WIND ACTION GROUP CORP. ALL RIGHTS RESERVED
WEBSITE GENEROUSLY DONATED BY PARKERHILL TECHNOLOGY CORPORATION