Flexible Asset Power Purchase Agreement market is small but highly competitive
Research from Cornwall Insight’s Flexible Asset Power Purchase Agreement (PPA) Market Report has allowed for a comparison between the different markets for PPAs for renewables and flexible assets. The graph highlights that one of the primary differences between the two sectors is the size.
The total size of the flexible asset market is much smaller than that for renewables, with the total capacity for flexible assets estimated at 4.5GW in 2019 compared with renewables’ 40.6GW.
Charlotte Farmer, Analyst at Cornwall Insight, said:
“It not just the size of the market that differs, the proportion of each market where developers are seeking PPAs from the offtaker market is significantly different. With up to 65% of the renewable market looking for a third-party PPA compared to just 40% of flexible asset capacity seeking this option.
“This stems from the higher proportion of utilities and large developer-trader organisations which will trade and optimise their flexible assets independently. In contrast, the renewables market has seen a higher level of independent developers, often without trading capabilities or relevant industry licences, that have required third-party PPAs for the offtake of their power.
“Despite the smaller size of the contestable flexible asset market, the sector is still highly competitive – with up to 20 offtakers competing to contract with flexible assets.”
This was posted in Bdaily's Members' News section by Cornwall Insight .
Enjoy the read? Get Bdaily delivered.
Sign up to receive our popular morning National email for free.