It is well to be noted that 2023 happened to be the most dynamic year for the European renewable power purchase agreement- PPA market, thereby indicating that it has gone on to enter its golden era after a record-breaking statistic when it comes to volume and number of deals that were inked in 2023, as per the Swiss advisory services company Pexapark.
Interestingly, the latest Pexapark report goes on to show that overall, 16.2 GW of contracted renewable power volumes happened to be disclosed in 2023, thereby representing a 40% surge in annual terms. The total number of reported deals leaped by 65% to 272.
PPAs, when it comes to solar power, happen to take the most significant position in the ranking, comprising 10.5 GW of the overall capacity in 160 deals. Onshore wind witnessed 2.3 GW of new capacity with 58 deals, and the power sales when it comes to offshore wind projects happened to have a mix volume of 2 GW throughout 20 deals.
Notably, the corporate players happened to be the major drivers of the PPA market last year, thereby securing 11.95 GW in 218 deals, marking a 28% surge in the contracted volume and also a 66% year-on-year rise when it came to deal count. It is worth noting that Amazon Inc. happened to be the top corporate buyer with 1.87 GW of deals throughout Europe, with Shell Energy having 654 MW and LyondellBasell, the Dutch chemicals major, having 583 MW following.
In the meantime, it was seen that the PPA volumes sold by utilities approximately doubled, surging to 4.02 GW with 48 deals from 1.96 GW in 30 deals, which took place in 2022. The first place in this category happened to be taken by Spain’s Iberdrola, which went on to ink 9 deals so as to unload power from 908 MW of capacity.
Regionally, Spain happened to be the leader in the PPA market, consistently keeping its top spot for five years in a row with 4.67 GW of the deals that were announced. Germany happened to be the next with 3.73 GW, and Italy, the UK, and Greece followed next which contracted almost 1 GW each.
Going forward, Pexapark anticipates the European PPA market to top 20 GW this year on the back of a pricing environment that is stabilizing, dipping volatility, and increasing maturity from both buyers as well as sellers in energy risk management. Nonetheless, while it is poised for further evolution, competition when it comes to contracts for difference- CfD and PPAs could very well be an issue, remarked Pexapark.