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ERCOT's PPA activity remained stable y/y, despite macroeconomic headwinds, as lower interconnection costs and land prices offset the impact of cost inflation due to higher interest rates and supply chain bottlenecks. This has incentivized positive negotiations between developers and off-takers, such as technology firms, chemical companies, and steel manufacturers, that have locked in a combined total of 4 GW of PPAs to hedge against long-term power price volatilities
PJM witnessed a rebound in activity y/y, fueled by increasing demand from technology firms, who are expanding their data center operations in the region. Leading this trend is Amazon, which has signed 11 PPAs in the market, following a recent commitment to invest $35bn to establish several data centers in Virginia
MISO and CAISO witnessed a notable decline in activities, attributed to elevated interconnection expenses. These increased costs, stemming from prolonged study durations, have escalated the financial burden on developers, straining negotiations with potential off-takers. Enerdatics believes that planned improvements to the interconnection procedures will result in an increase in PPA activity in both markets over the coming years
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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