Toward Global Comparability in Renewable Energy Procurement

Abstract

Prices from the competitive procurement of renewable energy sources 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 streams, which must be considered when cost estimates are to be deducted from procurement prices. The resulting metric enables decision makers and research to compare the total cost of procurement on equal footing and supplements established cost metrics.