According to Swiss consultancy Pexapark, around 400 MW of power purchase agreements were closed in Europe in March. Germany and Spain were the most dynamic PPA markets during the first quarter of the year.

Zurich-based renewable energy consultancy Pexapark has reported a sharp decline in European PPA activity for March.

The war in Ukraine is having repercussions on PPA prices and Europe could see very complicated electricity price curves in the remainder of the year, the analyst explained.

During the month of March, the average price of signed PPAs was €77.37/MWh, 3% higher than the February average of €74.9/MWh. “Our view is that downside risks generally outweigh potential gains in PPA pricing due to price spikes in the first and second years,” the company added.

Pexapark also revealed that nine power purchase agreements with an aggregate capacity of 400 MW were signed in Europe in March — a sharp decrease compared to February, when contracted capacity for unsubsidized renewables reached 1.3 GW across 18 deals.

March’s new contracts were secured mostly by energy-intensive industries such as chemical and metal producers and mining companies. Norway’s power company Statkraft, for example, signed a PPA with German chemical group Wacker in its home country and another one with Spanish steelmaker Tubos Reunidos in Spain

Germany’s corporate segment was the most active in the first quarter of the turbulent year thanks to deals secured by food giants such as Nestlé and Das Futterhaus. According to Pexapark, Germany has the foundations to become a great PPA market, and it seems that the global turmoil has set this trajectory in motion. Spain ranks second in the number of deals, withe four corporate PPAs totaling 936.8 MW being signed in the country in the first quarter of the year.

Pexapark furthermore revealed that Europe had also seen the first two storage-related PPAs signed in Europe during the first three months of the year. The consultant cites a 10-year deal secured by French energy company EDF for a 5.1 MW/1.7 MWh solar-plus-storage project selected by German authorities in a tender for innovative projects, which subsidizes part of the plant.