European PPA market prices fell 15% in December
Release time:2023-01-30 21:05:13 | Browse times:

Swiss consultancy Pexapark says falling energy prices, lower heating needs, and healthy gas reserves have had a calming effect on the European power purchase agreement (PPA) market. It foresees an increase in transactions over the short term.

European PPA market prices fell 15% in December

Pexapark has reported a sharp decline in European PPA activity for December. Prices fell an average of 15% month on month, mainly due to declining prices of electricity futures, which are contracts for future physical delivery of power to the grid, according to the Zurich-based renewable energy consultancy.

The prices of Dutch TTF gas futures fell throughout December. The one-year TTF gas reference contract fell 28.4% to close at €76.0 ($82.30)/MWh, compared to the maximum price closing price of €193.80/MWh in August.

Lower heating needs due to mild temperatures across Europe and healthy gas reserves have reassured buyers and sellers, leading to less aggressive pricing for future PPA contracts, according to Pexapark. However, despite the rosy outlook, analysts say that it is too early to rejoice and declare a possible end to the energy crisis, as gas supply prospects for 2023 remain fundamentally different from a year ago.

The Netherlands and Italy were the markets that experienced the most pronounced price decline, with -32.1% and -23.8%, respectively. The Iberian Peninsula registered the lowest prices, with €48.40/MWh and €48.70/MWh in Portugal and Spain, respectively. The United Kingdom registered the highest price once again at €113/MWh, followed by France at €93.80/MWh. Prices in Germany fell 7.9% to €92.40/MWh.

For PPA agreements in December, activity remained relatively stable in terms of the number of closed deals. However, Pexapark recorded a sharp decrease of 81% in terms of contracted volumes.

Now that there is more clarity on how the EU's revenue cap on renewables will be implemented, PPA activity is expected to increase in the coming weeks.

Print || Close
 Prev:US to add 63 GW of PV by end 2024
Copyright 2022-Jiangsu First Aluminum Technology Co.,Ltd All Rights Reserved