RenewaFi ERCOT PPA Report Finds Market Shift Toward Wind

Analysis of 596 bids to buy and offers to sell in ERCOT shows that wind is becoming relatively more valuable when compared to solar.

NEW YORK, Oct. 19, 2023 /PRNewswire/ -- Wind PPA offers became relatively more attractive to ERCOT buyers when compared to solar PPA offers over the past two quarters, according to a new report from RenewaFi, the marketplace for ERCOT renewables. Solar offers in ERCOT became less attractive at Houston Hub, North Hub and South Hub, while wind offers became more attractive at North Hub and West Hub. The trend is likely due to expected solar saturation in Texas, as already experienced in California.

Noam Yaffe, Founder and CEO, said: "A few years ago, buyers valued ERCOT solar because there was little solar capacity in that market, and the solar generation profile correlated with high prices and high demand. Wind, in comparison, was over built and worth little, resulting in wind PPAs in the low teens. Our data suggests that those preferences have started to flip in Q2 and Q3 2023."

Comparing offer prices to RenewaFi's proprietary calculation of value, the report finds that solar offers became $0.86 less attractive on average, while wind offers became $4.46 more attractive on average.

ERCOT Solar Offers

• At Houston Hub, the prices of offers decreased by $2.25, but the value of those offers decreased even more. As a result, solar at Houston Hub became slightly less attractive to buyers and was slightly out of the money by the end of Q3.
  
  
• At North Hub, the prices of offers increased by $1.50, while the value of those offers decreased. As a result, solar at North Hub became significantly less attractive to buyers and was out of the money by the end of Q3.
  
  
• At South Hub, prices decreased by $1.50, which was more than the decrease in value. As a result, solar at South Hub became slightly more attractive to buyers but was still out of the money by the end of Q3.
  
  
• At West Hub, prices increased by $0.20, while value increased more. As a result, solar at West Hub became significantly more attractive to buyers and was in the money by the end of Q3.

ERCOT Wind Offers

• At North Hub, the prices of offers increased by $1.95, but the value of those offers increased more. As a result, wind at North Hub became significantly more attractive to buyers but was still out of the money by the end of Q3.
  
  
• At West Hub, prices decreased by $2.30, while value stayed about the same. As a result, wind at West Hub became significantly more attractive to buyers and was in the money at the end of Q3.

The report, which includes 24 pages of nearly 50 charts and tables, is a product of the growing community of over 200 originators and traders on RenewaFi. These folks represent over 70 companies, including 32 investment grade firms.

The report covers what developers priced their offers at, how the market valued those offers based on RenewaFi's proprietary algorithm, and what buyers were willing to pay for those offers. There are also five deep-dive sections into solar and wind at the major ERCOT hubs.

To receive a sneak peek of the report, please complete this form. The full report is available to RenewaFi market participants only. Please schedule a demo or request access at [email protected] to learn more.  

About RenewaFi

RenewaFi is the marketplace and data resource for wholesale renewables in ERCOT, helping sophisticated market participants source and evaluate offtake. Originators and traders browse, post, and counter indicative bids and offers – all anonymously. When market participants agree on terms, they can chat and eventually match to reveal their identities and pursue bilateral negotiations. Additionally, RenewaFi's pricing tool and data set of hundreds of bids and offers helps originators make better decisions by providing a clear view of what to expect from the market. Learn more at www.RenewaFi.com.

Contact
Jeremy Zelinger, Head of Strategy & Marketing
[email protected]

SOURCE RenewaFi