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European PPA market set to grow as deals reach 16.2 GW in 2023

The past year was the most dynamic one for the European renewable power purchase agreement (PPA) market, indicating it has entered its “golden era” after record-breaking statistics for the volume and number of deals signed in 2023, according to Swiss advisory services company Pexapark.

The latest Pexapark report shows that a total of 16.2 GW of contracted renewable power volumes were disclosed last year, representing a 40% increase in annual terms. The overall number of reported deals jumped by 65% to 272.

PPAs for solar power take the most prominent position in the ranking, accounting for 10.5 GW of the total capacity in 160 deals. Onshore wind saw 2.3 GW of new capacity contracted in 58 deals, whereas power sales from offshore wind projects had a combined volume of 2 GW across 20 deals.

Corporate players were the major drivers of the PPA market in 2023, securing 11.95 GW in 218 deals, marking a 28% increase in the contracted volume and a 66% year-on-year increase in deal count. Again, Amazon Inc was the top corporate buyer with 1.87 GW of deals across Europe, followed by Shell Energy with 654 MW and Dutch chemicals major LyondellBasell with 583 MW.

In the meantime, PPA volumes sold by utilities almost doubled, rising to 4.02 GW in 48 deals from 1.96 GW in 30 deals in 2022. The crown in this category was taken by Spain’s Iberdrola, which signed nine deals to unload power from 908 MW of capacity.

Regionally, Spain was the leader in the PPA market, keeping its top spot for the fifth year in a row with 4.67 GW of announced deals. Germany came in next with 3.73 GW, followed by Italy, the UK, and Greece, which contracted around 1 GW each.

Looking ahead, Pexapark expects the European PPA market to top 20 GW in 2024 on the back of the stabilising pricing environment, decreased volatility and growing maturity from both buyers and sellers in managing energy risks. Nevertheless, while it is “poised for further evolution,” competition between contracts for difference (CfD) and PPAs could be a challenge, Pexapark said.


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