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European corporate PPAs set new records in 2020

Thursday, 15 April 2021

  • PPAs by new buyers and in new countries set records as companies ink some 4GW of corporate PPAs (CPPAs) in 2020 in Europe, according to WindEurope figures
  • 2GW of wind and 1.7GW of solar CPPAs were done in 2020.

The corporate sourcing of renewable electricity via Power Purchase Agreements (PPAs) has been growing steadily since 2015. In 2020 despite the COVID 19 pandemic turns out to be a record year for corporate renewable PPAs. The cumulative renewable capacity in Europe now under a corporate PPA rose by 50% to 12 GW. Record for the number of deals finalised in a year with 51 in total, including 24 signed for wind energy (of which 6 were for offshore wind) and 24 for solar. Volume of renewable energy corporate sourcing through PPAs in GW is given below:

Recent years have seen the development of offshore wind PPAs from the first in 2018 for a proportion of the capacity of Kriegers Flak in Denmark, to at least nine offshore wind farms signing corporate PPAs to date in Denmark, the Netherlands, Belgium, Germany, and the UK. Offshore developers look to corporate PPAs for revenue stability, allowing them to free up risk capital (if financing projects on their balance sheet) or to finance a higher proportion of the costs with cheap debt. Over 700 MW of offshore capacity was contracted in 2020, almost 20% of the total. 

However, the last couple of years has seen a rapid expansion in solar PPAs which has really helped drive the market growth. In 2020, wind accounted for just over half of the contracted capacity, and the other half were mostly from Solar PPA deals.

Typically, the Nordic region, followed by the UK and the Netherlands, were the biggest markets for these deals. However, in 2020, Spain, Germany, and Belgium signed significant volumes of PPAs. Spain in particular contracted more than 1.3 GW with over 1 GW of solar PPAs.

Wind Europe thinks CPPAs are being signed by more companies, across more sectors and more countries and will play an increasingly important role in meeting corporate demand for renewable electricity as well as supporting the finance and build-out of renewable energy in Europe.

Source: Wind Europe (pdf)