Pexapark reported in March that it had signed 23 new power purchase agreements (PPAs) with a combined capacity of approximately 2 GW. In the first quarter, developers announced nearly 70 PPAs totaling 6 GW.
Swiss consulting firm Pexapark has reported that 23 new power purchase agreements were signed in Europe in March, with a combined capacity of approximately 2.5 GW. This is the highest number Pexapark has ever registered in a single month and is a 14% increase compared to February. Although there were seven fewer offers in March than in February, the number of contracts is still higher than in any other month in 2022.
In the first quarter of 2023, developers announced nearly 70 PPAs totaling 6 GW.
According to Pexapark, the prices of the Pexa Euro Composite product rose by 0.5% compared to the previous month. Spain and Portugal maintained their position with the lowest prices in Europe. At the same time, Poland’s index registered the biggest increase, 28.9% compared to the previous month. In contrast, the Nordic countries experienced the steepest decline of 11.5% in the month of decline.
On March 14, the European Commission finally published its proposal for reforming the design of the EU electricity market. The authors of the report by Swiss consulting firm Pexapark expressed their enthusiasm after analyzing how some of the proposed reforms will affect the power purchase agreement (PPA) market on the continent. However, the authors noted that final legislation is not expected until 2025. Nevertheless, the authors believe that the European Commission’s new electricity market design reform proposal has the potential to usher in a golden age of PPAs.
Currently, 100–150 deals take place each year, generating 10–20 GW of new capacity. Pexapark estimates that the measures included in the reform could generate more than 1,000 TWh of business demand. This business demand will grow in tandem with GDP and general electrification efforts, resulting in hundreds of additional PPAs to support new renewable capacity.
Pexapark emphasizes that Europe’s transformation into a “much larger and more vibrant” PPA market will be supported by measures that enable new and increased investments in renewable capacity. In addition, the proposed credit support mechanisms will release the demand for power purchase agreements. “Based on our experience, credit has become a key barrier to increasing PPAs,” the authors explain. The Commission proposes that projects that have already committed part of their generation to the PPA allocate another part of the generation to buyers who have difficulty accessing the PPA market, such as small and medium-sized enterprises.