A new report from Enervis shows that Spain is currently the most attractive European market for PV projects with a PPA, with 4.39 GW of contracted capacity. Italy and Germany are the second and third markets for this type of project, with 1.91 GW and 1.05 GW, respectively.
Interest in power purchase agreements (PPAs) for photovoltaic and wind power plants in Europe has grown significantly in the last year. According to the report Status Quo: Market Parity of PV and Onshore Wind in Europe” by Enervis Energy Advisors, released by German consultancy Enervis, in Europe there is currently a 21 GW pipeline of wind and solar power projects for which a bilateral PPA has already been secured.
The study, which is based on data from 25 countries, reveals that the largest European PPA market for photovoltaic power plants is Spain. In 2019 alone, 4.39 GW of solar-linked PPAs were announced in the country.
Italy and Germany follow with 1.91 GW and 1.05 GW, respectively, with demand being also on the rise in Portugal (444 MW), Denmark (338 MW), France (158 MW), Ukraine (44 MW), Poland (35 MW), Sweden (16 MW) and the United Kingdom (6 MW).
Enervis believes that demand in this segment may further increase in the southern European countries, due to their higher solar radiation, although it stressed that difficult administrative procedures may present an issue for some countries the years to come.
Furthermore, the analysts said that the current status of the electricity market and the cost of electricity for renewable technologies are two factors that could give a further push to unsubsidized projects. According to their analysis, solar and wind power projects were able to achieve a price difference of up to €20/MWh compared to the wholesale market. This has been achieved, although the rising price trend on the EU electricity markets came to a standstill in 2019.
The risk of a cannibalization effect, which may be caused by increasing amounts of zero marginal cost electricity, is still rather moderate, the analysts also said.