European developers signed 30 power purchase agreements (PPAs) with a contracted volume totaling 2.2 GW in February, according to the latest analysis from Swiss renewables research firm Pexapark.
The result is a strong improvement on last month and is the highest monthly volume recorded since February 2024.
Pexpark says corporates accounted for 21 of last month’s deals, totaling 1.5 GW, with the remaining seven PPAs covered by utility-scales for 646 MW of capacity.
The largest deal of the month was a 426 MW solar PPA in Spain between Merlin Properties and Solaria Energia covering 40 years, which Pexapark says is the longest PPA tenor observed in the European market to date. For wider context, the current average PPA is around 11 years long.
Pexapark reports that around one-third of last month’s PPAs related to operational assets, which the company says reflects a growing trend in several European markets. “This shift is largely driven by a widening gap between buyer and seller price expectations,” Pexapark’s latest analysis reads. “New-build projects typically command a premium linked to additionality, whereas operational PPAs are priced closer to PPA Fair Values and often trade at a discount to the Transactable Price.”
There were 14 battery energy storage system (BESS) deals in February totaling 1.2 GW/3.3 GWh, encompassing both contracting under flexibility purchase agreements and merchant optimization agreements. The deals include Estonia’s first BESS PPA last month, linked to a solar-plus-storage project, as well as four tolling agreements, two of which were located in Great Britain.
Pexapark’s tracked PPA price closed at €42.70 ($49.17)/MWh last month for a 6.4% month-on-month decline.
Italy saw the largest drop, down 11.4% month-on-month, which Pexapark attributes to the approval of the DL Energia decree that brings in measures that could materially reduce gas-related cost components from 2027. Monthly drops in tracked PPA prices were also observed across the British, Dutch, French, German, Nordic, Polish, Portuguese and Spanish markets.
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