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Driving Additionality: Insights from the 2024 RE-Source Event

Updated: 7 days ago

Written By: Lynn HSIAO

Verified By: Vivian CHUANG

The 2024 RE-Source event took place on October 24-25 in Amsterdam, attracting even greater numbers of renewable energy buyers than in previous years.  This year's discussions reflected the growing interest in Power Purchase Agreements (PPAs), with a strong focus on PPA pricing, risk management, and the additionality of corporate renewable energy procurement.


One notable session, titled “How much will my PPA cost? Negotiating and managing risk”, held on October 24, delved into evaluating PPA costs from multiple risk perspectives. Historically, companies unfamiliar with PPA negotiations often relied heavily on traders or developers for guidance. However, as corporate experience with PPAs has matured, many businesses have developed their internal processes. This progress enables companies to assess risks and costs more accurately, tailoring decisions to their unique needs.

 

In another key session, "How additionality in corporate procurement strategies can drive investments in renewables," speakers highlighted three types of companies based on their approach to sustainability: SDG leaders, companies that value SDGs but have financial constraints, and companies that aim solely to meet minimum green-transition requirements. As stakeholder interest increasingly favors companies committed to additionality, many businesses reevaluate their renewable energy strategies to account for broader environmental and social benefits.


Despite these advancements, Europe’s renewable energy sector faces significant hurdles. The two primary challenges discussed were:


-Grid Access Delays: Over 500 GW of renewable energy capacity is currently awaiting grid connection permits, with some projects facing delays of up to seven years.


-Negative Electricity Pricing: Due to the uncertainty of renewable energy generation, there are moments of overproduction during peak periods, leading to excess electricity supply. As of August 2024, there have been over 1,031 hours of negative electricity pricing caused by overproduction, a 25% increase compared to 2023. Negative electricity prices also lead to curtailment, impacting the entire grid system.


To address these challenges, attendees recommended integrating energy storage systems and AI-driven solutions to enable smarter and more flexible renewable energy utilization.


The renewable energy and electricity markets in Europe are also evolving towards increased transparency and more equitable information sharing. These experiences in the European market could serve as valuable lessons for the future development of renewable energy markets in Asia.

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