The Power Purchase Agreement (PPA) market for flexible assets* in the last six months has grown in size and seen increased levels of competition as new offtakers and optimisers make themselves known in the market.
Based on Capacity Market (CM) agreements, there is ~4.8GW of flexible capacity operational at present. However, the true value is closer to 7GW when you include assets without live CM agreements.
Cornwall Insight’s Flexible Asset PPA Market Report shows that of this, ~4GW is under some form of third-party PPA, spanning almost 20 different offtakers that are now active in the market.
Tim Dixon Wholesale Team Lead at Cornwall Insight said:
“The amount of flexible capacity under a PPA is set to rise. Capacity has increased in line with the plant that has secured future CM agreements, as well as the need to complement the growth in intermittent renewables.
“We have seen from recent CM auctions a large amount of gas and battery storage plant in development. Many of these will be seeking a third-party PPA. Cornwall Insight’s research shows that 20 offtakers are now active in the flexible PPA market, with at least a further five independent flexibility providers also providing some form of service.
“It is unsurprising that as the capacity of flexible assets and the number of offtakers has risen, activity in the PPA market has picked up. The rising number of offtakers has created a competitive and dynamic market. This has led to more competitive pricing levels in PPAs.”
Notes to Editors
*flexible assets – front-of-the-meter gas and diesel engines, battery storage, open-cycle gas turbines and combined heat and power plants.