Accelerating load growth and thermal retirements mean fundamental changes for supply stacks and enormous opportunities for developers and off-takers. With many more projects in interconnection queues than can plausibly be built, however, the market for power purchase agreements (PPAs) and mergers and acquisitions (M&As) has grown increasingly complicated.

In a recent webinar, Dr. Gary Dorris, CEO at Ascend Analytics, joined Rahm Orenstein, Managing Director of Ascend Energy Exchange, Dr. Brandon Mauch, Managing Director of Operations and Strategy, and Dr. Brent Nelson, Managing Director of Markets and Strategy, to discuss what to expect and how to proceed in an environment of ultra-competitive PPA procurements and downward pressure on M&A prices.

Key Takeaways 

• Current interconnection queue capacity far exceeds system demand, by a factor of 1.5-4, depending on the independent system operator (ISO), with storage alone at 0.5-2x peak demand. Only a fraction of projects in development will get built.

• With developers trying to recycle capital, the M&A market possesses a glut of supply for early-stage projects. Successful M&A will require differentiating a project and articulating why it has a higher success probability than other projects. Interconnection agreement alone is not enough.  

• Demand growth, driven by electrification, increased industrial activities, data centers, and AI, points to a need for more energy and more capacity, with much new load seeking clean sources. However, the rate of supply additions will constrain demand growth in many locations.

• Transmission interconnection delays and supply chain congestion has led to a shortage of projects with commercial operation date (CODs) in the next three to four years, resulting in elevated near-term PPA prices.  

• For projects with CODs in the late 2020s and beyond, PPA prices have begun to stabilize as supply chains normalize and interest rates decline. Underpinned by Ascend's advanced modeling tools and market intelligence, the Ascend Energy Exchange™ (AEX) can help streamline the process of clean energy procurement and project sales by leveraging the Ascend ecosystem of energy consumers and asset owners.  

Access the full webinar now. 

Interested in Learning More?

AEX™ Ascend Power Procurement (APP) enables energy buyers to meet climate and reliability goals by conducting automated and highly competitive power procurement processes, totaling more than the U.S. data center load each year. Designed for utilities, community choice aggregators, and corporate renewable energy buyers, APP facilitates the process of executing PPAs by providing an RFP hosting service, shortening the processing time of bids, and evaluating offers with advanced modeling tools and analytics to capture project risks and true economic value. AEX™ Asset Sales, an exchange for renewable and storage projects, allows buyers to receive access to carefully vetted assets and portfolios, supported by Ascend’s full suite of market-level and project-level valuation, risk assessment, and unique off-take/hedge solutions.   Contact us to learn more. 

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Ascend Analytics is the leading provider of market intelligence and analytics solutions for the energy transition. The company’s offerings enable decision makers in power development and supply procurement to maximize the value of planning, operating, and managing risk for renewable, storage, and other assets. From real-time to 30-year horizons, their forecasts and insights are at the foundation of over $50 billion in project financing assessments. Ascend provides energy market stakeholders with the clarity and confidence to successfully navigate the rapidly shifting energy landscape.