Toward global comparability in renewable energy procurement

Philipp Beiter*, Lena Kitzing, Paul Spitsen, Miriam Noonan, Volker Berkhout, Yuka Kikuchi

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Prices from the competitive procurement of renewable energy are increasingly used for the comparative evaluation of financial and technology performance. Comparing prices from auctions or power-purchase agreements at their face value is often not meaningful, particularly across jurisdictions or over time. Differences in support regimes and the market, tax, and regulatory environment can make a like-for-like comparison convoluted and result in misleading conclusions. Here, we estimate project revenue and value holistically for eight global offshore wind projects. Using a cash flow model, we consider applicable support regimes; market sales; and the monetized value of tax incentives, depreciation, and transmission. We find considerable variation in the absolute levels and relative composition of project revenue and value, which must be considered for deducting costs from procurement prices. The resulting metric enables decision makers and research to compare the total cost of procurement on an equal footing and supplements established cost metrics.
Original languageEnglish
JournalJoule
Volume5
Issue number6
Pages (from-to)1485-1500
Number of pages16
ISSN2542-4785
DOIs
Publication statusPublished - 2021

Keywords

  • Levelized revenue of energy
  • Offshore wind
  • Support regimes
  • Price analysis
  • Procurement
  • Project revenue
  • Power-purchase agreement
  • Auctions
  • Policy instruments

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