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ISSN 2753-7757 (Online)

PPAs are driving Europe’s energy transition

21/9/2022

6 min read

Aerial view over large solar park in Germany Photo: EnBW/Paul Langrock
PPAs facilitate investments in new renewable installations in Europe – the new Alttrebbin solar park in Germany commissioned by EnBW was subsidy-free

Photo: EnBW/Paul Langrock

Corporate power purchase agreements (PPAs) have become an important driver of the energy transition and also enhance energy security in Europe, explains Joop Hazenberg, Policy and Impact Director of the RE-Source Platform, Europe’s leading forum for direct renewable energy sourcing.

Just 10 years ago, direct sourcing of renewable energy through long-term contracts was a market in the margins. Today it is definitely big business – and growing fast.

 

Corporate PPAs have proven to be an important driver of the energy transition and enhancing energy security. They facilitate investments in new renewable installations in Europe, while complementing public tenders and providing renewable suppliers with stable and secure revenues. According to the European Commission (EC), PPAs have to play a central role in Europe’s strategy to achieve the European Green Deal renewable and climate targets.

 

The corporate PPA market is expanding rapidly across Europe, with more than 20 GW of cumulative installed capacity by 2022. That is a five-fold increase in comparison with 2016. In 2021 alone, nearly 8 GW of renewable energy capacity was contracted. For wind energy, 10% of new wind farm capacity financed in 2021 was supported by a corporate PPA.

 

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