Strikes on liquefied natural gas (LNG) infrastructure in the Middle East are having implications on long-term PPAs and the economics of battery energy storage systems (BESS), according to analysis from Swiss renewables research firm Pexapark.
In Pexapark’s latest blog update, Nicolas Briet, lead analyst – renewable energy and BESS, said that reported strikes impacting Qatar’s Ras Laffan industrial complex, the country’s main site for LNG production, introduce a “more structural supply-side risk” to conflict in the Middle East and a tightening of medium-term fundamentals in Europe.
Briet added that these developments are starting to have a more visible effect on long-term PPA valuations.
He explained that while the impact remains relatively contained in markets such as Germany, where PPA valuations are anchored to power prices over a long period, the situation is different in markets where forward liquidity is limited to only two or three years, such as the United Kingdom.
“In these cases, long-term PPA valuations rely heavily on extrapolating short- and mid-term price signals. As a result, any change in medium-term fundamentals feeds through much more directly and fully into long-term valuations, leading to larger repricing,” Briet wrote. “This is already visible, with the PPA Fair Value of a 10-year solar Pay-as-produced (PAP) PPA in the UK increasing by around 19% since the start of the conflict.”
Image: Pexapark
Briet also said that despite improving PPA economics, transaction activity is unlikely to accelerate in the near term, with buyers remaining cautious over securing prices during a geopolitically-driven spike. “At the same time, higher global energy prices feed into the expected renewable cost base,” Briet wrote “Equipment, transport and construction costs are exposed to energy inputs, creating upward pressure on expected capital expenditures.”
Briet’s update added that battery storage is the most direct beneficiary of evolving market conditions, with higher gas prices increasing both absolute price levels and intraday volatility, leading to widening spreads.
Pexapark’s most recent analysis of the European PPA market found February 2026 had the highest monthly volume of new deals since February 2024, reaching 30, including the longest PPA observed in the European market to date.
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