Cookie Consent

By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.

Cookie preferences

Analysis: PPAs vs Government Auctions in Europe

Market Insights
March 9, 2023

State-subsidized clean energy auctions have played a key role in driving down renewable energy costs and increasing wind and solar capacity across Europe over the past few decades. But if recent years have proven anything, it’s that European corporations have a strong desire to buy green electricity — with private-sector procurements driving dozens of gigawatts of capacity additions, and with the PPA market poised to expand much further.

As EU politicians debate Europe’s electricity market reforms, recommendations from some member states, like Spain, have advocated for governments to largely supplant the role of private entities in the PPA market to leverage the price certainty PPAs bring. But is there evidence supporting the idea that the expanded use of fixed-price government contracts is the best way to keep Europe’s wholesale electricity prices at sustainable levels?

Data on how government auctions and PPAs stack up with regards to their respective abilities to cost-effectively drive renewable additions has been sorely lacking —until now. Kristian Lande, Senior Director of European Energy Analytics at LevelTen Energy, has examined several European nations to see how their varying degrees of reliance on government CfDs for renewable projects correlates with wholesale electricity prices, and with each country’s progress towards a decarbonized grid.

This robust analysis shows a clear negative correlation between low PPA volumes and high retail electricity rates, and conversely, that countries that have fostered healthy PPA markets are increasingly benefiting from lower retail electricity prices. As EU politicians work to address the continent’s energy crisis, these findings make abundantly clear the important role the PPA market has to play in protecting Europe’s ratepayers.

This analysis is now free to download by filling out the form below. For a deeper dive into the impacts of government auctions and PPAs across several European countries, as well as the latest European PPA pricing data and market intelligence, download our Q4 2022 European PPA Price Index report today.

Download the analysis for free by filling out the form below:

LevelTen Energy

LevelTen Energy is the leading provider of renewable transaction infrastructure, delivering the marketplaces, software, automated analytics, and expertise required to accelerate clean energy transactions. The LevelTen Platform is the world’s largest online hub for renewable energy buyers, sellers, advisors, asset owners and financiers. The Platform includes the LevelTen Energy Marketplace, which delivers access to more than 4,500 power purchase agreement price offers spanning 28 countries in North America and Europe. It also includes the LevelTen Asset Marketplace, which brings together over 800 renewable energy project developers and owners, and delivers the online tools and expertise they need to buy, sell and finance assets quickly. Together, LevelTen and its partners share #OneGoal to accelerate the energy transition.

Continue reading