Changing wholesale electricity market conditions that have led to lower prices are prompting RES producers to reconsider exercising a right to suspend, for two years, long-term operating contracts with RES market operator DAPEEP in order to establish PPAs or to engage in direct market participation.
Last month, numerous RES producers submitted applications to have their long-term operating contracts with DAPEEP suspended for two years but are now taking a step back and reevaluating whether it would be wise to do so.
Suspension applications submitted in February represented a total RES capacity of over 1,000 MW but investors who followed through to freeze their tariff agreements with DAPEEP, for two years as of March 1, totaled roughly 85 MW.
In January, when the two-year suspension right was introduced, RES producers representing roughly 150 MW went ahead with PPA suspensions. This figure is forecast to drop even lower, to a level of about 50 MW, in March.
Lower day-ahead market prices in the wholesale electricity market are forecast to remain low for quite some time. This is encouraging electricity consumers interested in establishing PPAs with RES producers to demand far lower prices for long-term supply agreements.