Swiss analytics firm Pexapark notes that February saw the highest monthly volume of new European power purchase agreements (PPAs) since February 2024, including the longest PPA observed in the European market to date.
European developers signed 30 power purchase agreements (PPAs) in February with a contracted volume totaling 2.2 GW, according to the latest analysis from the Swiss renewable energy research agency Pexapark.
The result is a strong improvement last month and is the highest monthly volume since February 2024.
Pexpark says companies were responsible for 21 of last month’s deals, for a total of 1.5 GW, while the remaining seven PPAs were covered by utilities for a capacity of 646 MW.
The biggest deal of the month was a 426 MW solar PPA in Spain between Merlin Properties and Solaria Energia over a period of 40 years, which according to Pexapark is the longest PPA duration observed in the European market to date. For a broader context, the current average PPA is approximately eleven years.
Pexapark reports that around a third of last month’s PPAs were for operating assets, which the company says reflects a growing trend in several European markets. “This shift is largely driven by a widening gap between buyers’ and sellers’ price expectations,” reads Pexapark’s latest analysis. “New construction projects typically require a premium associated with the additional value, while operational PPAs are priced closer to the PPA Fair Values and often trade at a discount to the Transactable Price.”
There were 14 battery energy storage system (BESS) deals in February totaling 1.2 GW/3.3 GWh, which included contracts under flexibility purchasing agreements as well as merchant optimization agreements. The deals include Estonia’s first BESS PPA last month, linked to a solar-plus-storage project, as well as four tolling agreements, two of which were based in Britain.
Pexapark’s tracked PPA price closed last month at €42.70 ($49.17)/MWh, down 6.4% month-on-month.
Italy saw the biggest decline, down 11.4% month-on-month, which Pexapark attributes to the adoption of the DL Energia decree that introduces measures that could significantly reduce gas-related cost components from 2027. Monthly declines in tracked PPA prices were also observed in the UK, Dutch, French, German, Nordic, Polish, Portuguese and Spanish markets.
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