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Rising power prices were supported by colder than average temperatures and record highs in the carbon market as participants bet on tougher policies to meet emission reduction targets, and demand for pollution rights increased from industrial buyers.
These effects, however, failed to feed through to PPA prices with any consistency in Q1 2021, with average offers in Spain dipping Eur4.00/MWh ($4.83/MWh) quarter on quarter, counterbalancing a Eur3.70/MWh rise in Germany and a Eur0.5/MWh rise in GB.
Auction vs PPA
Spanish PPA prices remain low thanks to a mature, liquid market and abundant solar resources, a trend that is set to continue through 2021, said Zeigo senior price analyst Freddie Lyons.