- 208 MW Solar PPA signing announced in April by LyondellBasell and Encavis Asset Management AG follows the busiest quarter to date for number of German PPAs signed
- 16 German PPAs announced in Q1 2024 totalling 648 MW of capacity, after record breaking year 2023 with 42 German PPAs announced and 3.7 GW of capacity
- Despite record activity, Germany’s renewables sector continues to grapple with decreasing power prices, high financing costs, and capital expenditure challenges
Zurich, 15th April 2024 – Germany’s renewable energy sector has closed a record number of PPA transactions throughout the first quarter of 2024, according to new Power Purchase Agreement (PPA) data from Pexapark, the trusted provider of reference prices and market intelligence for renewable energy.
According to Pexapark’s latest data, the German PPA market has maintained its record-breaking momentum throughout Q1 2024. 16 PPAs announced in the first quarter of 2024 representing 648 MW of capacity, the highest number of PPAs signed in the country in any quarter to date.
This follows a significant increase in publicly announced PPAs in 2023, which totaled 42 agreements and 3.7 GW of capacity, making Germany the second largest European PPA market after Spain, accounting for about 23% of Europe’s contracted capacity during that period.
Quarterly Signed PPAs in Germany
Quarterly PPA MW Signed in Germany
This high level of activity in Q1 2024 was followed by one of the largest Solar PPAs the German market has seen to date, announced in early April. The 12-year, 208 MW PPA signed by Encavis Asset Management with chemicals giant LyondellBasell covers 80% of the output of the 260MW Bartow Solar PV project, ranking among the largest of its kind in Germany. Pexapark supported Encavis Asset Management as commercial advisor throughout the structuring and negotiation process of the PPA transaction.
Growth is being driven by increasing demand for renewable energy, particularly from corporate and industrial buyers. Sustainability targets and price hedging remain primary motivations for corporations, with many recognising the strategic advantage of locking in prices for the long term amid relatively decreased market prices.
Max von Hausen, Country Lead PPA Transactions – Germany, Pexapark, said: “Germany’s position as a leader in the renewable energy market remains strong, as evidenced by the steady influx of large PPA announcements. The LyondellBasell-Encavis agreement is one example of the growing confidence in the German post-subsidy renewables market and underscores its attractiveness for sustainable investment.”
Amid this success, challenges do persist. Renewable energy developers and operators across Germany – as well in Solar – have faced a difficult environment since the latter half of 2023, characterised by decreasing power prices, increased financing costs and continuous high capital expenditure.
“To navigate these challenges and capitalise on the opportunities presented by the evolving market, developers and independent power producers (IPPs) must focus on offtake agreements with competitive PPA prices and well-balanced risk structures, while continuing to optimise development and financing processes,” Max added.
Having worked closely with Pexapark on one of Germany’s biggest PPAs, Elisabeth Rabe, Team Lead Investment Structuring, Encavis Asset Management AG, said, “Pexapark’s expertise has been instrumental in navigating the growing yet complex German renewable energy market. Together, with LyondellBasell, we have ensured that our recent deal was not only successful but also strategically advantageous for both businesses. It’s essential that corporates and suppliers seek the best intelligence and price references to secure competitive deals and drive sustainable investment.”
About Pexapark:
Pexapark is the trusted provider of reference prices and market intelligence for renewable energy.
We deliver daily, market-representative prices for Power Purchase Agreements (PPAs) to 200+ renewable energy sellers and offtakers, alongside leading data providers, consultancies, and governmental and industry bodies.
We complement this price data with powerful analytical tools and market intelligence to help our clients stay informed on market changes and manage the evolving risks and opportunities involved in renewable energy.
Then, through a unique combination of advisory services and portfolio management software, we go one step further, giving businesses deeper support in executing deals, optimising their portfolios and developing their strategies.
Pexapark was founded in 2017 with a mission to accelerate the energy transition towards net zero by creating an efficient market for renewable energy. For more information, please visit www.pexapark.com or get in touch with us at hello@pexapark.com.
About Encavis Asset Management AG:
Encavis Asset Management AG offers institutional investors tailor-made portfolios and fund solutions for investments in the growth market of Renewable Energies. The Company has been successfully investing in this sector since 2006, covering the entire value chain from asset sourcing to the operational management of investments.
Encavis Asset Management AG is a wholly owned subsidiary of MDAX-listed Encavis AG (ISIN: DE0006095003, Prime Standard, Ticker symbol: ECV) and, as part of the Encavis Group, benefits from their many years of experience and broad industry network. Encavis AG is one of the leading independent power producers (IPPs) in the field of Renewable Energies in Europe. The Encavis Group’s installed capacity currently adds up to around 3.5 gigawatts (GW), of which around 2.2 GW is provided by Encavis AG. This corresponds to a total saving of around 0.8 million tonnes of CO2 per year stand-alone for the Encavis AG. In addition, the Group currently has around 1.2 GW of capacity under construction, of which around 830 MW are own assets. Another Group member company is Stern Energy S.p.A., based in Parma, Italy, a specialised provider of technical services for the installation, operation, maintenance, revamping and repowering of photovoltaic systems across Europe.
Encavis is a signatory of the UN Global Compact as well as of the UN PRI network. Encavis AG’s environmental, social and governance performance has been awarded by two of the world’s leading ESG rating agencies. MSCI ESG Ratings awarded the corporate ESG performance with “AA” and ISS ESG with their “Prime” label (A-).
Please visit our website www.encavis-am.com for additional information.
