EU Witnessed Signing 7.1GW Of PPAs Till September 2023: EY Report By Chitrika Grover/ Updated On Wed, Nov 22nd, 2023 A report by Ernst & Young (EY) provided an update on the Renewable Energy Countries Attractiveness Index (RECAI), focusing specifically on offshore wind energy. According to the report, India maintained its 16th position, consistent with the previous year. India’s technological standing in Concentrated Solar Power (CSP) is noted at 34.3, while solar Photovoltaic (PV) is at 62.7. The index emphasizes wind and solar Power Purchase Agreements (PPAs), accounting for 93% of the weight and representing the majority of offsite corporate PPAs. In contrast, the European Union (EU) experienced a positive year, marked by numerous signed PPAs. For example, by the end of September, Europe saw the signing of 7.1GW of PPAs, surpassing the total for 2022 at 6.6GW. A record of 7.6GW is expected to be exceeded by 2021. This surge has led to inflation rates, impacting various PPA markets. However, recent months have seen a gradual easing, aided by factors such as the revision of the Renewable Energy Directive (REDIII), targeting 42.5% renewables for all EU energy consumption by 2030, and expedited permit-granting processes. The corporate PPA market faces challenges, primarily driven by increasing generation costs and decreasing long-term wholesale markets. This dynamic has led to a narrowing price band, making PPA market deals viable for both developer returns and corporate savings. The report predicts potential supply bottlenecks for turbines and components in the US and Europe by 2025, influenced by the positive effects of the US Inflation Reduction Act (IRA). Europe’s heightened ambition, coupled with rapid developments in China Mainland and other large markets, contributes to this scenario. Highlighting a trend, the report notes a significant surge in solar capacity in the US, aiming to set a record production capacity. The US solar sector is thriving, expected to add a remarkable 32GW of production capacity in 2023, reflecting a 53% increase from the capacity added in 2022. Financial incentives from the Inflation Reduction Act (IRA) play a crucial role in driving this growth. However, a persistent challenge until at least 2035 is securing an adequate supply of critical materials and metals essential for turbine manufacturing, given the high risk of supply disruptions. The report underscores that the primary tension in the corporate PPA market stems from escalating generation costs and declining long-term wholesale markets, potentially resulting in a tighter price band that aligns PPA deals with both developer returns and corporate savings.