Pexapark records slight decrease in European PPA prices for November

Pexapark has released the December edition of its PPA Times report, which includes all PPA deals closed in November.

Most PPA prices in Europe reflected lower electricity and raw material prices. The Swiss consulting firm's EURO Composite fell 3.3% month on month and stood at €52.20 ($56.90)/MWh. For comparison, in November last year, European PPA prices reached €94/MWh.

While most countries' indices mirrored the downtrend, with Poland experiencing the steepest decline at -6.6%, some regions saw opposite trends. For example, PPA prices in Portugal and Spain saw an increase of 2.7% and 2.8% respectively. Additionally, PEXA France rose 7.9%.

Although in March Pexapark announced the “beginning of the golden era of PPAs in Europe”, it seems that the forecasts have not been completely fulfilled. In November, 24 new PPAs were announced for a total of 1,132 MW, which is 10 less than the previous month – a decrease of 38% compared to the October record and a drop of 32% compared to the 1,643 MW signed then. In November 2022, 16 PPAs were announced with a total capacity of 1,881 MW.

For Pexapark, the highlights of November's activity include the signing of a relatively rare solar PPA in Germany between Sunnic Lighthouse, a subsidiary of Enerparc, and British oil company BP for 70.5 GWh per year that will generate six new-build photovoltaic projects totaling 76.5 MW. The PPA will begin in 2024 and will last for 10 years.

The consultancy also points out that the Italian PPA market has experienced a significant acceleration this year with a focus on onshore wind repowering reaching 18 agreements, and the trend continues to evolve: four more were signed in November. In total, they add up to 855 MW, an increase of 143% compared to the 351 MW registered in 2022.

Spain, for its part, leads the cross-border PPAs. Under one of them, Matrix Renewables will provide Merck with more than 102 MW of solar capacity over a decade, starting in 2025, for its operations throughout the European Union and Switzerland. The agreement is linked to three new construction solar projects in Spain.

The second agreement, lasting 10 years, has been signed by Renantis, formerly Falck Renewables, with Merck through a 50 MW onshore wind portfolio in northwest Spain.