European PPA prices rose 2.2% in August, led by a 4.9% increase in the United Kingdom, while announced PPA capacity fell sharply to 335 MW. Corporate buyers dominated PPA activity, as storage-related agreements held steady at 869 MW and included major BESS deals in the United Kingdom and the Netherlands.
European power purchase agreement (PPA) prices rose 2.2% in August, according to the Euro Composite Index from Swiss consultancy Pexapark. The United Kingdom recorded the largest monthly increase, at 4.9%, followed by Germany and the Netherlands, both at 2.8%, and Italy, at 1.6%. Prices remained virtually unchanged on the Iberian Peninsula. France posted a marginal increase of 0.2%, while prices in the Nordic markets fell 1.2%.
The increase in the United Kingdom was largely driven by revised PPA benchmark values following an update to Pexapark’s market price risk assessment. The consultancy said market evidence indicates that buyers have reduced the discounts applied to this risk, raising contract values across a range of technologies and structures. The effect was most pronounced for longer-term contracts, with prices for a 10-year PPA rising by around GBP 5 ($6.80)/MWh for comparable start dates.
European PPA activity slowed significantly in August, with 14 agreements covering around 335 MW announced during the month. This compares with 24 agreements totaling approximately 1.1 GW in July. Pexapark said the slowdown was partly attributable to the European summer holiday period.
Corporate buyers accounted for 13 of the 14 agreements and approximately 298 MW, equivalent to 89% of the reported capacity. Onshore wind dominated, with around 214 MW, or 64% of the total, largely due to four agreements signed by Amazon in Sweden. Solar accounted for approximately 89 MW, while the remaining 37 MW came from a hybrid solar-plus-storage PPA in Germany.
Activity involving flexibility purchase agreements (FPAs) increased in August, with 11 deals covering approximately 869 MW and 2.4 GWh of reported storage capacity. The total volume was virtually unchanged from July despite the lower number of transactions.
Merchant revenue-sharing arrangements accounted for four deals totaling 374 MW, including the month’s largest agreement, for the 300 MW Iceni battery energy storage system (BESS) in the United Kingdom. Three tolling agreements added 309 MW, led by a 200 MW contract signed by Vattenfall for the Sirius project in the Netherlands. A 10-year agreement covering an 80 MW project in the United Kingdom, featuring a revenue floor and market participation, was also announced.
In Germany, MaxSolar and DB Energie announced the country’s first time-profiled hybrid PPA, combining a 37 MW solar plant with a 15 MW/30 MWh battery. The agreement enables solar generation to be shifted to different times of day. Meanwhile, the 200 MW tolling agreement for Sirius highlights progress on flexible grid-connection arrangements for large-scale BESS projects in markets facing grid constraint
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