European Renewable PPA Prices Continue Remarkable Rise, Up 16% in Q2 and Nearly 50% Year-Over-Year, According to LevelTen Energy

Los precios de los PPA renovables en Europa continúan aumentando notablemente, un 16% más en el segundo trimestre y casi un 50% año tras año

LevelTen Energy’s new report reveals that European P25 solar and wind PPA prices* increased 16% in the second quarter of 2022 to 66,07€ per MWh. Year-over-year, prices have increased a staggering 47%. .

In the second quarter, European renewable energy buyers saw power purchase agreement prices soar 16% to 66,07€ per MWh, according to a new report from LevelTen Energy, the leading provider of renewable transaction infrastructure and operator of the world’s largest PPA marketplace. Compared to last year, prices are now 47% higher, a staggering increase driven by the region’s complicated energy crisis and inflation. .

European PPA Market Highlights

LevelTen’s Q2 report, covering April to June 2022, shows PPA prices and trends in 13 countries across Europe, including: Denmark, Finland, France, Germany, Greece, Ireland, Italy, Lithuania, Netherlands, Poland, Spain, Sweden, and the U.K. The report is based on actual PPA price offers uploaded onto the LevelTen Energy Marketplace from wind and solar project developers over the last quarter.

Market highlights include:

  • Poland, where P25 solar prices rose 36,2% to 95€ per MWh. Demand for renewable energy PPAs has spiked due to the cessation of natural gas imports from Russia. Supply is struggling to keep up because of burdensome permitting barriers and government auctions.
  •  Italy had the largest share of European PPA offers on LevelTen’s Energy Marketplace (more than 32%). Italian P25 solar PPA prices have soared 22% year-over-year but stayed flat quarter-over-quarter and currently sit at 51.5€ per MWh.
  • Greece made it onto LevelTen’s European PPA Price Index for the first time since its creation in 2020. “While Greek solar offers represent solid values, both buyers and sellers there should be aware of how the Greek market differs from other European ones.
  • Spanish PPA prices remained relatively stable at 39.50€ per MWh, bucking the trend of rising prices.

What Do Buyers Need to Know about Procuring in this Market?

“PPAs are still compelling because PPA value – the potential financial upside of a PPA contract – still remains attractive,” said Sørensen, VP of Europe at LevelTen Energy. “In the near term, wholesale energy prices are forecasted to stay elevated but that won’t be the case indefinitely. Buyers that want to maximize their chances of using a PPA as a financial hedge should act now, as projects with 2023 commercial operation dates are nearly all accounted for.”

Equally important is the environmental value that PPAs deliver. “Greenwashing is a big concern for many offtakers who are focused on hitting their renewable energy goals. PPAs provide the highest amount of benefit to the environment because they drive more renewable generation capacity. Corporations and other offtakers that enter into PPAs get to tell a powerful impact story,” said Sørensen.

Apart from higher PPA prices, LevelTen also reports important changes to the way that PPA contracts are getting negotiated. Its report includes a survey of energy buyers and sellers, of whom approximately 50% said that indexing PPA prices to commodities prices or other capital expenditures is important to getting PPAs signed.