Number of Power Purchase Agreements for renewable technologies increasing

Flexible assets PPA market

• Since August 2019 flexible assets have seen 530.6MW of optimisation agreements announced.
• 197.6MW of this capacity, from seven individual agreements and seven individual offtakers, has been announced since the beginning of April 2020.
• The total market for third-party or “contestable” flexible asset PPAs is just over 4.0GW.

Lee Drummee, Analyst at Cornwall Insight, said: “There is an emerging competition in the flexible asset space, with a vast range of offtakers winning contracts. “Five of the seven new agreements were for battery storage assets, accounting for 171MW of capacity, while the remaining two deals were for 26.6MW of gas engine capacity. The largest of these deals in terms of capacity was between EDF and Zenobe.

“Flexible asset deals are predominantly short-term arrangements, with many now including provisions to access revenue streams such as the Balancing Mechanism. Despite a relatively small market size against the renewables space, we have also observed two new offtakers enter this market to provide services in recent months.”

Renewables PPA market

• The renewables PPA market has also seen notable activity since the beginning of August 2019.
• Cornwall Insight has identified 38 new PPAs representing around 1.5GW of capacity, which has been publicly announced.
• Just over 1GW of this capacity relates to capacity already operational, with the largest deal for 892MW of capacity.
• 420MW of new build projects have signed PPAs during the same time. The largest of these projects is the 240MW South Kyle windfarm being constructed by Vattenfall.

Lee Drummee, Analyst at Cornwall Insight, continued: “While the renewables PPA market is more established than flexible asset PPAs, we see this market being just as active in the coming years. Our research shows a wave of assets will be exiting long-term PPAs set up through previous financing arrangements and will be seeking new deals. These sites, as well as older assets re-powering, are likely to keep this area a very dynamic space.”