Market update · Europe
European Solar PPA Prices Rise 2.2% in August Amid Slower Activity
In August, European power purchase agreement (PPA) prices increased by 2.2%, driven primarily by a 4.9% rise in the United Kingdom. Despite the price increase, announced PPA capacity fell sharply to 335 MW, with corporate buyers dominating the market. Storage-related agreements remained steady at 869 MW, including significant battery energy storage system (BESS) deals in the UK and the Netherlands.
SolTraCo market update · · 3 min readPPA Price Trends Across Europe
European PPA prices rose by 2.2% in August, according to the Euro Composite Index from Swiss consultancy Pexapark. The United Kingdom led the increase with a 4.9% rise, followed by Germany and the Netherlands, each with a 2.2% increase. Prices on the Iberian Peninsula remained virtually unchanged, while Nordic markets experienced a 1.2% decline.
The UK price increase was largely due to revised PPA benchmark values after an update to Pexapark’s market price risk assessment, reflecting reduced discounts applied by buyers and raising contract values across various technologies and structures. This effect was most notable for longer-term contracts, with 10-year PPA prices rising by around GBP 5 ($6).
PPA Market Activity and Capacity
PPA activity in Europe slowed significantly in August, with only 14 agreements announced covering approximately 335 MW, compared to 24 agreements totaling about 1 GW previously. The slowdown was partly attributed to the European summer holiday period.
Corporate buyers dominated the market, accounting for 13 of the 14 agreements and approximately 298 MW, representing 89% of the reported capacity. Onshore wind led with around 214 MW (64% of total), largely due to four agreements signed by Amazon in Sweden. Solar accounted for approximately 89 MW, and a hybrid solar-plus-storage PPA in Germany contributed the remaining 37 MW.
Storage and Flexibility Agreements
Flexibility purchase agreements (FPAs) increased in August, with 11 deals covering approximately 869 MW and 2. The total volume remained virtually unchanged from July despite fewer transactions.
Merchant revenue-sharing arrangements included four deals totaling 374 MW, featuring the largest agreement for the 300 MW Iceni BESS in the UK. Three tolling agreements added 309 MW, led by a 200 MW contract signed by Vattenfall for the Sirius project in the Netherlands. Germany saw its first time-profiled hybrid PPA combining a 37 MW solar plant with a 15 MW/30 MWh battery, enabling solar generation to be shifted to different times of day.
Sources
This update is an original SolTraCo synthesis of the linked industry sources. Reported facts and commercial interpretation are kept separate. It does not contain confidential deal information and is not investment, legal or technical advice.