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PPA | RENEWABLES

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Corporate PPAs surge 55% in 2023 led by solar – RE-Source

(Montel) Corporate power purchase agreements (PPAs) in Europe jumped 55% last year to reach a record high of 10.4 GW of contracted capacity – with solar deals leading the charge, renewable platform RE-Source said on Thursday.

This compared with 6.7 GW contracted in 2022 and the previous annual high from 2021, when 7.6 GW were signed, Annie Scanlan, policy and impact director at RE-Source, told a PPA webinar.

Of the 2023 PPA capacity, a record-breaking 6.1 GW of solar PPAs were signed last year compared with 2.7 GW in 2022.

The emergence of collective PPAs and innovative financing schemes were the key drivers of solar PPA adoption, enabling more off-takers to participate in renewable energy procurement, Simon Dupond, policy analyst markets and investments at SolarPower Europe, told the webinar.

Last year also saw the first PPAs combining electricity and storage and the first PPAs for green hydrogen production, said Scanlan.

“Best in class”
Spain continued to be “the best in class” in the European PPA market, adding almost 3 GW of new PPA capacity with 31 deals signed in 2023, closely followed by Germany with just over 2 GW, Scanlan added.

Other countries such as France, the UK and Sweden also saw notable growth in PPA activity, reflecting a continent-wide momentum towards renewable energy adoption, she noted.

Looking ahead, “Germany looks like it’s poised to challenge Spain for the title of the most active PPA market,” she said.

Despite a slight dip in 2022 attributed to market volatility caused by the Russian war on Ukraine, Germany’s rebound in 2023 was strong with a total of 30 PPA deals, nearly on a par with Spain, she noted.

The most active industry continued to be big tech, driven by deals signed by Amazon and Google, Scanlan said.

As for the wind sector, offshore wind is emerging as a significant growth area, said Guy Brindley, head of market intelligence at WindEurope.

Building on the momentum of previous years, the analysts said they were optimistic about 2024’s prospects, highlighting the growth potential of sectors such as consumer goods, manufacturing and retail.

With less volatile PPA prices and corporate demand on the rise, the analysts predicted a robust year ahead, with expectations exceeding 10 GW of contracted capacity in 2024.