Energy price volatility reshapes PPA market – Pexapark

Volatility challenges long-term PPA models, while corporate market grows with rise of mega-buyers such as Amazon

Price volatility in European energy markets is driving a shift away from long-term power purchase agreements (PPA) to shorter-term offtake deals for renewable assets, according to software and PPA advisory company Pexapark. Annualised volatilities in European front-year traded energy contracts, a key driver in PPA pricing, reached 250pc last year—five times the level of usual spikes. Recent energy price volatility, driven by surging natural gas prices, will have lasting impact on the PPA market and will “test the availability and pricing for long-term PPAs of 10 years or more”, Pexapark says in its European PPA Market Outlook. “This market uncertainty will herald in the era of the short-term