@Agathe - Premiums might be present with short-term bias, but those contracts - are they long-dated ? 5 years? I'm sure corporates have an expectation that power prices will reverse over time i.e. head lower.
In general, I think willingness to pay is very limited beyond near wholesale power prices.
Value based pricing is impossible in the renewables world, its alomst always cost+adder.
it is not the "big tech" issue if other players have not hedged properly their position on the spot, and now find themselves unable to serve their positions
it is not a matter of "renewable energy corporate PPA" which has nothing to do with raising power prices on the market
(side note : I would though recommend to look into premium currently asked by developers taking advantage of high spot prices to double their premium, which will either drive structural price increase of electricity - from renewables included, or end up with a number of failure if actual prices do not meet price projections sold by those developers - and accepted by the investors)
side note appart, CPPA is just a sound hedging strategy, and the reason why "big tech" have been more dynamic in this market than any other players (traders, retailers - which by they way can just as well enter into long term PPA !) because they were putting more value on the environmental benefit of a renewable CPPA
at the time most of those long term PPA were signed, this was a bold move as prices trends were going downward (by the way : driven by renewables), and the only reason it was making any sense is because of the valuation the RE component...
good for them, too bad for the other : the market has turned around, and those long term hedges are currently proving to be extremely profitable
that's the game.
In the end it was the people who took other parameters than money in their decision making which ended up making the right decision...and that actually feels good
I'm not criticizing Big Tech, and indeed as you point out they have been smarter about this than others - whether it's because of other reasons or just well-thought-out greed is another question. And they are benefitting from their decisions, so they are not victims here.
What I'm saying is that developers do not really have a choice as to who they can find as buyer: the reality is that the only corporate buyers out there are Big Tech, and by entering into PPAs with them they have to give up a good part of the value of the electricity to the buyers.
That would be fine if there was no alternative, altogether. But we know there is an alternative: publicly organized CfDs, which create a de facto public buyer for these projects
and allow the public to be the beneficiary of stable prices.
So: regulators should be as smart as Big Tech and put in place CfDs. By not organizing CfDs, they abandon the benefit of stable prices for electricity to Big Tech. Not sure there is any bad faith in pointing that out.
@Agathe - Premiums might be present with short-term bias, but those contracts - are they long-dated ? 5 years? I'm sure corporates have an expectation that power prices will reverse over time i.e. head lower.
In general, I think willingness to pay is very limited beyond near wholesale power prices.
Value based pricing is impossible in the renewables world, its alomst always cost+adder.
C'est d'une mauvaise foi confondante...
it is not the "big tech" issue if other players have not hedged properly their position on the spot, and now find themselves unable to serve their positions
it is not a matter of "renewable energy corporate PPA" which has nothing to do with raising power prices on the market
(side note : I would though recommend to look into premium currently asked by developers taking advantage of high spot prices to double their premium, which will either drive structural price increase of electricity - from renewables included, or end up with a number of failure if actual prices do not meet price projections sold by those developers - and accepted by the investors)
side note appart, CPPA is just a sound hedging strategy, and the reason why "big tech" have been more dynamic in this market than any other players (traders, retailers - which by they way can just as well enter into long term PPA !) because they were putting more value on the environmental benefit of a renewable CPPA
at the time most of those long term PPA were signed, this was a bold move as prices trends were going downward (by the way : driven by renewables), and the only reason it was making any sense is because of the valuation the RE component...
good for them, too bad for the other : the market has turned around, and those long term hedges are currently proving to be extremely profitable
that's the game.
In the end it was the people who took other parameters than money in their decision making which ended up making the right decision...and that actually feels good
I'm not criticizing Big Tech, and indeed as you point out they have been smarter about this than others - whether it's because of other reasons or just well-thought-out greed is another question. And they are benefitting from their decisions, so they are not victims here.
What I'm saying is that developers do not really have a choice as to who they can find as buyer: the reality is that the only corporate buyers out there are Big Tech, and by entering into PPAs with them they have to give up a good part of the value of the electricity to the buyers.
That would be fine if there was no alternative, altogether. But we know there is an alternative: publicly organized CfDs, which create a de facto public buyer for these projects
and allow the public to be the beneficiary of stable prices.
So: regulators should be as smart as Big Tech and put in place CfDs. By not organizing CfDs, they abandon the benefit of stable prices for electricity to Big Tech. Not sure there is any bad faith in pointing that out.
This is actually a very good idea.