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The European PPA market entered an adjustment chapter last year, characterized by record deal-making for smaller volumes, according to Pexapark. Price stabilization has been a key activity enabler over the past 18 months.
The manifestation of cannibalization risk through increased negative price events and low capture rates, alongside multi-faceted price risk, resulted in a year with vivid appetite in Europe for power purchase agreements (PPAs), but for more conservative volumes, the Pexapark Renewables Market Outlook 2025 showed.
Decreased utility PPAs impacted the volumes of the big picture. The firm’s tracker registered a total of 15.2 GW disclosed contracted volumes – a decrease of around 11% vis-à-vis 2023. The most drastic trend was the 59% year-on-year drop in publicly disclosed utility PPAs, alongside a 38% fall in the deal count.
Conversely, disclosed corporate offtake volumes decreased by a slight 1%. Overall, the year saw at least 316 long-term PPAs – a 14% increase, attributed to corporates, which rallied their dealmaking by 26%. A record number of corporates signed their inaugural PPA in 2024. In total, 157 new players enabled around 5.2 GW.
Pexapark registers price volatility weakening
It’s no longer the standard that balancing contracts follow the tenor of the PPA hedge, as used to be the case a few years back. This shift has created an active market, as asset owners tend to go one to three years long on balancing and issue tenders every couple of years.
Negative prices have shaken the PPA risk allocation
The pricing environment of 2024 was relatively stable, with reduced day-to-day volatility from the highs of previous years. Pexapark’s yardstick started the year at EUR 49 per MWh and ended at EUR 52 per MWh.
The accelerated frequency of low, zero and negative pricing hours eventually reached negotiation rooms, signalling a notable shift in the market dynamics. Mostly driven from the buy-side, the main issues were the compensation during negative hour events, defining the price triggers and the impact of risk allocation on the overall price of the PPA.
Spain’s volumes highest by far while Germany secures gold in deal count
Spain remained the most popular destination for PPA deal-making by disclosed contracted volumes for a sixth consecutive year, with a total
of 4.66 GW – a 5.5% decrease.
An interesting event spicing up deal flow trends was that Germany actually topped the charts by deal count with 48 long-term PPAs – a 9% increase on an annual scale. It was the distant second in volume, with 2.04 GW or 46% less than in 2023.
As for the region that Balkan Green Energy News covers, Greece earned sixth place in volume, growing 4.3% to 0.97 GW from four deals. Entering the top 10, Romania hosted 12 agreements for an overall 0.46 GW. It was 77% more than in the previous year.
Iberdrola, Amazon maintain top positions in volumes
Unsurprisingly, the report adds that Spanish Iberdrola claimed the top spot among producers for a second consecutive year. In total, it brought home 1.25 GW – 38% more than the year before – across 15 corporate deals, an impressive 67% surge. The utility’s geographical footprint expanded across five countries, covering all key technologies.
On the buyers’ side, Amazon also earned the top spot for a second consecutive year, having contracted more than 1.5 GW. It was a 20% drop. The company went shopping in Spain (756 MW of onshore wind and solar), Greece (360 MW onshore wind), Britain (282 MW offshore wind) and Ireland (105 MW onshore wind).
Information technology maintained the top position in volume, 3.8 GW, across 38 deals – 5% and 56% more, respectively, than in 2023. With more than 8 GW, standalone solar fell 28%.
Onshore wind came in at 3.1 GW, which is 25% up, while offshore was halved to 937 MW. The most dramatic increase came from PPAs combining mixed renewable electricity technologies. It saw a 219% spike to 2.75 GW. The company forecasted that mixed-tech PPAs would double in volumes this year.
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