Presentations

Abstract

Proper assessment for renewable investments and PPAs requires considering spatial and temporal constraints, correlating weather outcomes across markets, and using granular time resolutions. By replaying 30 years of past weather, considering increased wind and solar capacities, demand, interconnectors, storage, and changes in conventional power production, we are able to produce 30 different hourly forecasts for power prices, flows, generation by type, and emissions in 16 European countries in hourly resolution up to 2035. These forecasts can reveal counter-intuitive findings about PPAs, such as pay as produced fixed-price PPAs for German wind leading to higher risk than having no PPA at all. This is due to the sensitivity of capture prices to wind power production: in windy weather scenarios cannibalization leads to lower capture prices than low-wind weather scenarios. A fixed-price PPA will pay the same price per MWh regardless of the wind power production, leading to more uncertainty of revenues wrt weather. This does not happen in all markets nor all years. Even in Germany after 2028, the drop in capture prices in windy weather scenarios becomes so large that these scenarios get lower overall revenues, despite the higher than average production. In this case having a PPA does reduce risk wrt weather. Other PPA structures such as monthly and annual baseload were studied. These PPA structures are found to always increase revenue risk wrt weather. Furthermore, monthly baseload PPAs were found to provide similar risk and revenue levels as annual baseload, thus not providing any benefit for the seller nor buyer.