Negative Prices Drive Crucial Innovations in Europe’s PPA Market – Pexapark Renewables Market Outlook 2025
Despite new risks in Europe’s renewable energy Power Purchase Agreement (PPA) market, 2024 saw a surge in corporate PPA activity and the emergence of innovative deal structures across the European market.
Published today, the fifth edition of Pexapark’s annual report, Renewables Market Outlook 2025, delves into these trends and highlights that last year marked the beginning of a ‘Big Adjustment Chapter,’ as sellers and buyers are adapting to evolving renewable energy market conditions.
Corporates sustain the market
In 2024, Pexapark recorded a total of 15.2 GW in disclosed contracted volumes, representing an 11% drop compared to 2023. The most drastic trend impacting overall volumes was the YOY 59% drop in publicly disclosed Utility PPAs. On the contrary, disclosed corporate offtake volumes decreased by a slight 1% YOY.
However, one of the year’s main headlines is the new record of at least 316 long-term PPAs – a 14% YOY increase. Corporate buyers are exclusively responsible for the milestone, depicting a 26% rise in deal-making activity despite smaller volumes. Notably, the market saw 157 new corporate players joining Europe’s PPA sphere.
In 2024, it became clear that although Net Zero is always an underlying driver of the European PPA Market, growth rates are impacted based on market-driven risks. Stabilizing price volatility was a key activity enabler over the past 18 months, but cannibalization risk and elevated LCOE in tandem with increased competition with Contracts-for- Difference (CfD) schemes tested corporate risk appetite and brought to the fore Green Premia in pricing.
At the same time, the market is already proving its ability to adapt and overcome challenges, as illustrated by exciting innovation in Mixed-technology PPAs and battery storage offtake agreements.
Top performers – leading markets, buyers, and sellers
Spain has once again emerged as the leading market in 2024, achieving 4.66 GW across 47 deals. In terms of volumes, Spain eclipsed second-place Germany, which nevertheless recorded the highest deal count at 48 transactions, totalling 2.04 GW.
Among sellers, Iberdrola retained its top spot for the second year running, with 1,251 MW contracted across 15 deals. It was followed by BRUC (532 MW) in second place, with Renewable Power Capital (517 MW) landing in third.
Top sellers by disclosed volumes (MW)
Source: PPA Tracker, Pexapark
On the buyer side, Amazon led the pack with 1,503 MW disclosed across six deals, followed by Google with an estimate of 638 MW and Microsoft with 540 MW.
Top corporate buyers by disclosed volumes (MW)
Source: PPA Tracker, Pexapark
“In 2024, the PPA market 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 Luca Pedretti, COO and Co-Founder of Pexapark.
“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.”
The Pexapark Renewables Market Outlook 2025 is the fifth edition of an annual report series by Pexapark. The report includes a full-scale review of PPA deal-making in 2024, analysis of the pricing themes that shaped the market, emerging trends and innovation in PPA structures, and Pexapark’s predictions for the upcoming year.
Download the full report here.
Pexapark | www.pexapark.com