PPA-linked RES project interest surges, favorable conditions

Investment interest in wind and solar energy projects planned to offer their output through power purchase agreements (PPAs) has grown sharply, as indicated by a large number of preliminary PPA agreements submitted by investors to power grid operator IPTO for entry into a priority-status category established through a ministerial decision.

A 1,500-MW limit that had been set by the ministerial decision for this category has been greatly exceeded, according to energypress sources. The energy ministry has already decided to elevate this limit, but it remains unclear if the bar will be raised sufficiently to fully cover the heightened level of investment interest being declared.

RES producers are turning to PPAs in greater numbers as a result of lower fixed tariffs being offered at RES auctions staged by RAE, the Regulatory Authority for Energy, market officials have pointed out.

Another key factor behind this trend is the greater need for green power generation being expressed by suppliers, due to a wholesale cap, as well as industrial players, all of which is creating favorable PPA conditions offering RES producers higher fees.

A considerable amount of grid capacity for PPA-based RES projects is expected to be made available through the cancellation, by energy authorities, of RES projects that have held connection terms for quite some time but inexplicably remained stagnant.