Aurora Energy Research

In November 2022, Germany’s Energie Baden Württemberg and steelmaker Salzgitter Group signed one of Europe’s first power purchase agreements (PPAs) for hydrogen production. More have followed and with the European Union introducing rules to govern green hydrogen, an industry is planning for its future.

Europe’s solar installation levels are exceeding expectations and are on track to grow 30% this year from 2022, according to Rystad Energy.

BloombergNEF Senior Analyst Jenny Chase and Aurora Energy Research Renewables Lead Rebecca McManus speak with pv magazine about financial market trends for solar companies and the role of overcapacity as a driver of turbulence in the industry.

According to Aurora Energy Research, Europe is on track to install at least 95 GW of grid-scale battery energy storage systems by 2050, up from 5 GW of installed capacity today, and representing more than €70 billion ($76.9 billion) of investment.

Battery energy storage saw a major increase in contracted capacity in British auctions this year, with many utility-scale projects securing long-term deals. The business case, however, is not as strong for all storage durations.

Last year was another landmark 12 months for energy storage, with all indicators pointing to a massive surge in demand. Supply chain instability and inflation saw battery prices rise but the industry demonstrated an ability to swiftly react to geopolitical developments. We look at five trends driving the market.

The retirement of coal baseload capacity, some regulatory adjustments and high energy prices volatility could bode well for the deployment of batteries in Italy, and especially in Sicily. Problems, mostly related to the timing and the structure of the auction, remain, however. We spoke about it with Michele Scolaro, Aurora Energy Research Associate.

Pioneering solar projects which signed ten-year feed-in tariff agreements will soon need to operate free of subsidy and with local authorities like the City of London starting to embrace direct contracts with renewables generators, the PPA market could be set for another turbo charge.

Corporate power purchase agreements and the combination of PV plants with hydrogen production open up new medium-term financing opportunities for solar projects, as was demonstrated at the fourth session of the pv magazine Roundtable Europe event. The evolution of corporate deals may have been slowed by current price developments but hydrogen may come sooner than many had predicted.

Ofgem passed its long-awaited, controversial plan for network charges last week, despite earlier warnings against the move. The UK electricity market regulator’s Targeted Charging Review has provoked a backlash in the renewables sector, as many believe that the plan will damage the economics of distributed energy resources and unsubsidized onshore wind and solar development.