The European renewable energy Power Purchase Agreement (PPA) market experienced a strong rebound in 2024, securing nearly 19 gigawatts (GW) of newly contracted capacity, as reported by Wood Mackenzie in its latest Europe Renewables PPA Tracker.
Spain and Germany led the market, together contributing 30% of the total contracted capacity. Solar photovoltaic (PV) and wind energy projects made up roughly 80% of this capacity, with both technologies contributing nearly equal shares. Poland, the United Kingdom, and Greece also emerged as key players, ranking in the top five across corporate, utility, and route-to-market PPAs.
New Contract Trends Gaining Momentum
As the market evolves, PPA contracts are becoming more innovative. One emerging trend is the inclusion of battery storage with renewable projects, designed to mitigate the impact of negative electricity pricing.
Dan Eager, Research Director for European Power & Renewables at Wood Mackenzie, noted a growing trend toward more advanced PPA structures. He highlighted that although still limited in number, hybrid contracts combining renewables with battery storage are increasingly popular, especially among high-energy users like data centers aiming for continuous clean energy supply.
Corporate PPAs Dominate Activity
Corporate PPAs remained the leading contract type in 2024, accounting for over 70% of total agreements, followed by route-to-market deals. The technology and data sectors were the biggest consumers, turning to PPAs to secure long-term energy supply and advance their sustainability targets, Eager explained.
Price Dynamics in a Shifting Market
The pricing landscape at the beginning of 2025 remains complex, shaped by factors like curtailment risk, periods of negative pricing, and changes in retail electricity rates. Though overall PPA prices dropped in 2024 due to falling wholesale energy costs, regional and technological variations persist.
Eager highlighted that Iberian markets, particularly Spain and Portugal, offer some of the most favorable conditions for PPAs in both solar PV and onshore wind.
2026 Forecast Shows Continued Opportunity
Wood Mackenzie’s 2026 forecast suggests continued potential for competitive PPA deals, particularly in the solar PV segment and selected onshore wind markets. The report also points to the possible emergence of hydrogen PPAs in Europe, pending greater regulatory clarity.
Dan Eager concluded that the increasing impact of low-cost renewables on wholesale prices is driving greater market volatility. He noted that capture rates are expected to decline over the next 5–7 years as renewable supply outpaces demand and market flexibility is tested. Despite falling prices, Eager emphasized that well-structured, mutually beneficial PPA opportunities still exist across different markets and technologies.
