Mixed-tech green power deals jump as offshore wind and solar slump
Surge in negative power prices prompts corporate rethink in wind and solar deals, while Amazon and Iberdrola retain crowns as top buyers and sellers of renewable energy
Demand for mixed-tech green power purchase deals jumped in Europe last year as corporates sought to shield themselves from price volatility, finds a new report that also revealed the market’s top buyers and sellers
Swiss analytics firm Pexapark revealed the findings today in its latest European Renewables Market Outlook, which recorded a total of 15.2GW in disclosed power purchase agreements (PPAs) last year.
The PPA market last year “proved its ability to innovate facing the new realities of increased renewables penetration, as the challenges of negative pricing and cannibalisation have forced a rethink of traditional approaches,” said Pexapark co-founder Luca Pedretti.
“Multi-technology PPAs for firmer profiles, multi-buyer models, and innovation in energy storage offtakes signal strong resilience. By adapting to these new realities, the industry can overcome obstacles and continue driving the energy transition forward.”
As the renewables rollout gathers pace in Europe, developers, corporates and grid operators have struggled to deal with swings in variable wind and solar generation.
The accelerated frequency of low, zero and negative pricing hours “reached negotiation rooms” last year, found Pexapark. This caused a “notable shift in the market dynamics,” or, put another way, the “Big Adjustment.”
One of the main issues up for discussion was compensation to buyers during periods of negative power prices; and how to share this risk when negotiating PPAs.
The 15.2GW of PPAs entered last year represented an 11% drop from 2023. Last year did however set a record of at least 316 long-term PPAs – a 14% increase. This was driven by corporates, with 157 new corporate players joining Europe’s PPA sphere.
Solar continued to dominate, providing more than 8GW of this total, but its volume also slumped by 28%. Pexapark noted that with negative pricing on the rise, a solar-only PPA “could be a complicated sell to some,” with the technology, in a way, “needing to reinvent itself”.
Mixed-tech deals ‘steppingstone’ to 24/7 green power
Offshore wind PPAs also declined to 937MW – 50% down on 2023. Pexapark attributed this to a lack of new projects in the market. Onshore wind went in the other direction, hitting 3.1GW of deals, a 25% increase.
The big winner, however, was mixed renewable technologies PPAs, which jumped from 860MW in 2023 to 2.75GW last year – a 219% increase. This capacity came through 32 deals in 12 countries, up from 11 deals in five countries in 2023.
Pexapark said that the mix of technologies offered “risk mitigation” for both sellers and buyers.
The setup of these PPAs is not always clear, said Pexapark, with the possibility of assets from separate projects providing power – although there were some with co-located wind and solar assets.
Pexapark said research it has conducted suggests that an optimised portfolio of wind and solar PPAs can achieve at least 60% hourly matching – a value that increases with battery storage in the mix.
Pexapark described these mixed technology deals as a “stepping stone” in the journey towards 24/7 green PPAs becoming widely available. This desire for baseload green and clean power is a pressing concern for corporates striving to hit decarbonisation goals without compromising their operations, whether that be a data centre or factory.
Spain remained the most popular destination for green PPAs for a sixth consecutive year with a total of 4.66 GW – a minor 5.5% decrease from last year’s volumes. Germany however saw the highest number of long-term PPAs agreed at 48.
Iberdrola cemented its dominance as the top corporate seller, with 1.25GW in capacity sold – up 38% on the year before – across 15 deals.
Amazon also maintained its position as the largest green power buyer, contracting more than 1.5GW across six umbrella deals – although this was a 20% year-on-year decrease. Amazon splashed cash in Spain (756MW of onshore wind and solar), Greece (360MW onshore wind), the UK (282MW offshore wind) and Ireland (105MW onshore wind).
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