Which market mechanisms will see the SAF industry take off?

Last July FGA spoke to Giles Dickson, CEO of Wind Europe, on the advice of a European Commission energy specialist.

Giles talked through the mechanisms Wind Europe used in their role as the association building the renewable electricity industry from wind.

Giles discussed that PPAs (power purchase agreements) were put in place with high-profile customers such as Facebook, ebay and google which demonstrated low risk to investors. This gave the capital investors the green light to be able to put the financial structures and contractual agreements in place and move funding toward the industry, providing finance to build the wind farms. In time governmental tendering encouraged companies to compete on pricing and it was this combined strategy which lead to electricity prices from wind reduce by 5 times over 10 years, and deliver affordable renewable electricity for businesses and households.

Onshore wind: 10 years ago: €150-200/mwh; today: €35-60/mwh

Offshore wind: 10 years ago: €250-300/mwh; today: €50-85/mwh

SAF is currently 3 times the price of fossil fuels. A plant can take up to 2 years to build; financial structuring and partner development can also take just as long. This gives us a basis for estimations on the time it will take to rollout further plants in this early stage industry.

IATA created an infographic video showing what is needed from a volume and commitment perspective to create carbon neutral growth from 2020 in avaition.

It is going to involve time and a lot of complex work including policy changes, mandating, awareness building and business development to see this industry take off.

At FGA, we are working on this and are partnering with key stakeholders to deliver the energy transition in aviation.

If you would like to find out more about how you can play a role as an individual or business then contact sarah@flygreenalliance.org

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