European solar developers dropping auction tariffs for PPAs because of higher prices

Mar 31, 2022 04:29 PM ET
  • European solar developers hit by increasing module prices are scrapping tariffs secured in auctions and are instead wanting to sign power purchase agreements (PPA), according to a speaker at today's Large Scale Solar event.
European solar developers dropping auction tariffs for PPAs because of higher prices
Image: Solar Media

Christopher Renna, commercial supervisor at working as a consultant Natural Power, claimed that with developers impacted by climbing capex for projects under growth, they are in some cases "able to find means to bow out their tariff, sign a PPA-- we have seen people exploring this alternative and some actually looking extremely closely at taking it".

Other programmers are taking a "really risky proposal" of delaying module purchases to see if rates will decrease in the coming months, Renna claimed at the event, hosted by PV Tech publisher Solar Media in Lisbon. He added: "So there are individuals that have some projects that have extremely tight margins. We see this across the industry, throughout markets in Europe. So people need to get creative to fit within those restrictions."

One company impacted by such cost increases is Akuo Energy, a developer and independent power producer that was granted 370MW of capacity in Portugal's solar auction in 2019, which featured record-low quotes.

" We are suffering," said João Maria de Macedo Santos, head of area, Portugal, at Akuo Energy. However, the firm is progressing with projects it safeguarded in the auction, with one anticipated to begin soon.

To deal with the temporary volatility, "it's key to have extremely long-term financing companions", with Akuo having teamed up with insurance provider and also pension funds, João Maria de Macedo Santos claimed.

Resembling comments made during the event the other day, he stated developers need to work on highlighting the benefits of solar to the general public. "We see in Portugal, public opinion requires to be changed from a danger to a possibility. It's a great deal of work for promoters, additionally the public industry to clarify, educate individuals, share the value of these projects in your area."

The panel discussion counted on provide chain issues, with Mark Augustenborg Ødum, co-founder as well as primary investment police officer of Better Energy, exposing that the Danish independent power manufacturer has long-lasting plans in position with its vendors, including container traffic from China, to minimize such difficulties.

Nonetheless, with parts of China entering brand-new COVID-related lockdowns and European solar gamers having considerable exterior dependence for products, Augustenborg Ødum called for a ramp-up of polysilicon production in Europe.

"The elephant in the room is polysilicon production. We need a massive polysilicon production facility in Europe," he claimed, adding aids need to be given in the European Union.

Solar Installers, Manufacturers