“ Energy users in logistics and real estate are showing more and more interest in green energy supply ” lenders will be unlikely to support projects that include offtake parties with a weaker financial backbone because of increased counterparty risk .
Renewable energy lenders have also been accustomed to feed-in-tariffs set above the average market rate , while PPAs tend to be priced below spot prices as a trade-off for committing to long contract periods . It will take time for project finance lenders to be willing to assume more risks .
“ In the coming years we expect project finance lenders to become more comfortable with corporate PPAs and market-price risk . We believe that most lenders will be prepared to take on some market-price risk during the tenor of the corporate PPA ,” Rabobank analysts say .
Meanwhile , prices for Dutch guarantees of origin have slumped amid the coronavirus crisis and oversupply but renewed demand for local , green energy from councils and corporate users could prove a boon for the nascent market .
With the Netherlands lurking near the bottom of Europe ’ s renewable energy production rankings , local green electricity supply has been scarcer than in other European power markets .
Energy users wishing to procure green electricity have in the past often opted for GOs originating from other European countries such as Norway or Germany . But as the Netherlands is seeing considerable growth in solar and wind power , commercial energy consumers are starting to seek local GOs .
” Energy users in logistics and real estate are showing more and more interest in green energy supply . All of my clients now want to have green energy ,” says Stefan van Haagen , director at Real Estate & Energy , a Dutch-based energy procurement advisory .
While large corporate energy users have opted for direct PPAs with Dutch renewable projects , smaller consumers are increasingly buying GOs as a less time-consuming way to certifiably turn their energy green , and more and more of them are seeking local supplies .
Some of them are government institutions racing against the clock to meet local , regional and national carbon emissions reduction targets . The council of Arnhem in the east of the Netherlands , for example , plans to procure all of its electricity from local , green sources by 1 January 2023 .
Arnhem is part of a group of 17 Dutch councils that has launched a European tender for the supply of green and regional electricity from 2023 . “ Until that time we are also buying GOs for Dutch wind ,” says council spokesman Maurice Chattelin .
The council is purchasing around 20,000 GOs this year to cover its electricity needs , of which 70 % originates from Dutch wind farms and 30 % from other regional projects .
The council of Nijmegen , also a customer of the European tender , aims to be carbon neutral by 2045 . “ We have chosen GOs because this is the only reliable way to see where the carbon is sourced from and how sustainable it is ,” says council spokesman Freico-Jan Amberg .
Dutch GO prices have fallen considerably and have created a buying opportunity . One green electricity offer from July seen by Montel showed a Dutch wind GO for delivery in 2021 at EUR 1.34 / MWh , compared with a Dutch wind offer for delivery in 2019 at EUR 5.60 / MWh .
” I think it is a good market now for corporate buyers . The Dutch market has changed a lot over the past year and flipped from a sellers ’ market to a buyers ’ market ,” says Weero Koster , a Dutch-based green energy adviser .
But the addition of around 1.5 GW in offshore wind capacity before the end of this year could have a further downward impact on prices , other experts say . With the coronavirus pandemic dampening economic activity , the Dutch GO market is already flooded with excess certificates as large energy users have consumed less than expected . n
Montel Magazine 3 – 2020
29