Solar, wind builders back EU contract reforms if steered by nations

(Reuters, 28 Apr 2023) EU market reforms will expand the pool of long-term energy buyers that provide revenue certainty to solar and wind operators but support mechanisms must be market-specific, developers said.

Changes to the EU electricity market design set out by the European Commission (EC) last month will make it easier for businesses to sign long-term power purchase agreements (PPAs) while aiding developers with counterparty risk that can deter investors.

The reforms aim to encourage solar and wind growth while also protecting consumers from rocketing energy prices seen after Russia invaded Ukraine.

Under the proposals, all customers will have the right to request fixed-price long-term contracts and utilities and other suppliers will have to manage price risks and hedge part of their supply portfolio against potential wholesale price spikes. To aid suppliers, national governments will have to ensure they have access to market-based guarantees that address the credit risk of buyers.

Customers will not be obliged to sign fixed-term contracts and national governments will be permitted to temporarily fix energy bills if wholesale prices spike to extreme levels.

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Reuters, 28 Apr 2023: Solar, wind builders back EU contract reforms if steered by nations