Nearly 19 GW of renewables were contracted under PPAs in Europe in 2024, according to Wood Mackenzie.
The consultancy’s “Europe Renewables PPA Tracker Report” says Europe’s PPA market surged last year, led by solar and wind projects, which represented 80% of the total contracted capacity.
Spain and Germany were the leading European markets, accounting for 30% of total capacity, with Poland, the United Kingdom, and Greece rounding out the top five across all deal counts.
Corporate PPAs continued to dominate the market, representing over 70% of last year’s deals. Dan Eager, research director of European renewables at Wood Mackenzie, said the technology and data sectors were the primary offtakers in 2024. He added that these sectors are “increasingly relying on PPAs to sustain their future operations and meet sustainability goals.”
Wood Mackenzie’s report also noted an increase in PPAs for renewables co-located with battery storage, which it said helps to address negative pricing periods.
“While still a small part of the overall market, hybrid storage arrangements that combine renewables and batteries in a single contract are gaining traction, particularly among energy-intensive industries and data centers seeking 24/7 energy matching,” added Eager.
Wood Mackenzie said it expects continued opportunities for competitive PPA deals this year and next, especially in solar and select onshore wind markets. The report also projected that hydrogen PPAs could emerge, depending on regulatory clarity.
According to Wood Mackenzie’s wholesale market modeling, capture rates are set to decrease over the next five to seven years, with demand growth expected to lag behind renewable supply additions.
“Over this period, average market prices will also be falling as European gas prices decline. In turn, the capture price and risk components in PPA pay-as-nominated prices will evolve,” Eager explained. “While market conditions vary, our fundamentals-based forecasting indicates that there are still opportunities for mutually beneficial PPA deals. The key will be navigating the complexities of each market and technology to find the right fit for both developers and offtakers.”
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