According to a report released on Wednesday, prices for wind and solar power in major worldwide markets have risen roughly 30 per cent in a year as producers deal with unpredictable supply chains and rising expenses for everything from shipping to parts to labour.
According to a quarterly index by LevelTen Energy that measures the transactions, known in the industry as power purchase agreements, contract prices for renewables increased by 28.5 per cent in North America and 27.5 percent in Europe in the previous year (PPAs).
According to LevelTen, prices jumped 9.7 percent in North America and 8.6 per cent in Europe in the first quarter.
Since Russia's invasion of Ukraine, economic, logistical, and labour market disruptions during the coronavirus pandemic have increased, erasing a decade of cost reductions in the renewable energy sector.
Higher costs have the potential to stifle demand development at a time when the UN has urged for renewable energy to expand more quickly to avert the worst effects of climate change.
"We still need keep the foot on the gas here," Rob Collier, vice president of LevelTen's energy marketplace, said in an interview.
Adding to the sector's difficulties in North America, politicians in the United States are debating whether to extend tax advantages for renewable energy plants, as part of President Joe Biden's climate change strategy. Developers are also concerned about an investigation launched by the US Commerce Department earlier this year, which might result in tariffs on solar panel imports from Asia, raising 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 conflict in Ukraine has prompted countries to strive to minimise their reliance on Russian natural gas, raising demand for renewables even further.
In an interview, Oscar Perez, a partner at Spain-based fund manager and renewable energy provider Q-Energy, said the battle was "the final straw for a market where there was already a lot of price tension."
According to Raymond James analyst Graham Price, higher renewable energy costs in Europe, combined with the continent's stringent climate policy, could boost the attraction of more expensive technologies like green hydrogen and biofuels.
Demand has not slowed as a result of rising pricing, according to LevelTen. According to the survey, 75 per cent of the company's 21 sustainability and energy advisers stated their clients have accelerated or maintained purchase strategies.
"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."
The rising expense of fossil fuels is one reason driving purchasers to renewables.
"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."
(Source:www.latestly.com)
According to a quarterly index by LevelTen Energy that measures the transactions, known in the industry as power purchase agreements, contract prices for renewables increased by 28.5 per cent in North America and 27.5 percent in Europe in the previous year (PPAs).
According to LevelTen, prices jumped 9.7 percent in North America and 8.6 per cent in Europe in the first quarter.
Since Russia's invasion of Ukraine, economic, logistical, and labour market disruptions during the coronavirus pandemic have increased, erasing a decade of cost reductions in the renewable energy sector.
Higher costs have the potential to stifle demand development at a time when the UN has urged for renewable energy to expand more quickly to avert the worst effects of climate change.
"We still need keep the foot on the gas here," Rob Collier, vice president of LevelTen's energy marketplace, said in an interview.
Adding to the sector's difficulties in North America, politicians in the United States are debating whether to extend tax advantages for renewable energy plants, as part of President Joe Biden's climate change strategy. Developers are also concerned about an investigation launched by the US Commerce Department earlier this year, which might result in tariffs on solar panel imports from Asia, raising 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 conflict in Ukraine has prompted countries to strive to minimise their reliance on Russian natural gas, raising demand for renewables even further.
In an interview, Oscar Perez, a partner at Spain-based fund manager and renewable energy provider Q-Energy, said the battle was "the final straw for a market where there was already a lot of price tension."
According to Raymond James analyst Graham Price, higher renewable energy costs in Europe, combined with the continent's stringent climate policy, could boost the attraction of more expensive technologies like green hydrogen and biofuels.
Demand has not slowed as a result of rising pricing, according to LevelTen. According to the survey, 75 per cent of the company's 21 sustainability and energy advisers stated their clients have accelerated or maintained purchase strategies.
"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."
The rising expense of fossil fuels is one reason driving purchasers to renewables.
"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."
(Source:www.latestly.com)
