Hedging on Hybrid: An Interview with Plácido Ostos

September 7, 2026

For the first time, LevelTen Energy's quarterly PPA Price Index includes hybrid price data.

We sat down with Plácido Ostos, Head of European Analytics at LevelTen Energy, to unpack the data and talk through what's really driving the European PPA market.

Jump to a specific question:

Plácido, what motivated the decision to include hybrid PPA price data in the latest Price Index?

Hybrid PPAs are emerging as a key tool for addressing the growing risks of cannibalisation and negative pricing for corporate energy buyers – challenges that simply didn't exist in the European market five years ago.

In simple terms, solar cannibalisation occurs when a large amount of solar capacity comes online at once (for example, at midday). This daily surge in supply pushes down wholesale energy prices, which lowers the value of energy tied to pay-as-produced solar PPAs.

By incorporating storage into a solar PPA (making it a hybrid deal), a buyer can capture value outside of normal solar generation hours. Typically, this would be during the evening demand peak, when solar production is lower and wholesale prices tend to be at their highest.

Multi-technology offer types on the LevelTen Platform, including solar+storage, solar+wind, and wind+storage, increased dramatically between Q2 2025 to Q2 2026. Their rise is a clear indication of the availability of high-value hybrid deals for buyers.

*Multi-technology offer types on the LevelTen Platform increased dramatically between Q2 2025 to Q2 2026. Image: Levelten Energy*

This type of PPA brings greater flexibility in terms of products. But critically, they also mean higher contract value, stability, and insulation against volatility compared to traditional PPA structures.

Hybrid PPAs in Europe are, on average, priced 24% higher than solar PPAs – a premium that accounts for the added capex for storage. But the increased value hybrid deals deliver across the tenor of a PPA means they invariably provide a financially superior outcome for buyers. In Germany, adding storage to a solar project can increase captured values for buyers by up to 80%.

Since they are a nascent product, comparing and valuing different hybrid deals is an opaque affair. That’s why we’ve launched our Hybrid PPA Price Index, to give buyers and developers clarity on how markets across Europe are transacting these deal types.

Let’s talk more about buyers. What are you hearing from the buy-side of the PPA market right now?

The first thing to say is that Europe's energy buyer community continues to be hesitant to procure. That's partly a function of ongoing challenges presented by ongoing low and negative wholesale power market prices as cannibalisation persists. These pressures are undermining the economics of solar PPAs and forcing buyers to explore new deal types like hybrid PPAs, which provide superior financial outcomes.

On top of that, ongoing revisions to the Greenhouse Gas Protocol (GHGP) framework are adding real uncertainty. Buyers can't know for sure whether contracts they sign today will conform to future GHGP Scope 2 emissions requirements, and that uncertainty makes people cautious.

Thirdly, we are witnessing a slight paradox in how markets are responding to global uncertainty, with many buyers waiting for chaos in wholesale energy markets to subside before making long-term procurement decisions. This is an understandable approach to deep market uncertainty, but it can also be counterproductive: market volatility is one of the strongest cases for locking in long-term, price-stable energy deals.

How about energy sellers? How are they navigating the current landscape?

On the sell-side, the most significant change we are seeing is the rapid deployment of battery energy storage systems (BESS). These can be paired with new and existing generation assets to shore up project financials and bring PPAs back into favorable economic territory.

The challenge is that corporate buyers generally have minimal experience contracting for storage-backed deals. That's exactly why LevelTen and our partners have been working hard to develop a suite of hybrid PPA contract types which remove the complexity of storage operation from contracting dynamics. For corporate buyers looking for simple offtake agreements that don’t involve day-to-day battery management, contracting solutions exist and are already gaining traction on the LevelTen Platform.

Hybrid PPAs have grown more abundant in recent quarters, and I expect the market to keep moving in this direction, particularly in countries where PV cannibalisation is most severe. The debut of the LevelTen Hybrid Index, featured in our latest PPA Price Index, provides unprecedented pricing transparency into the hybrid market.

Hybrid offers made up nearly half of all offers in our PPA Price Index dataset last quarter, with hybrid projects in Spain and Germany alone accounting for almost one-third of all European offers in the report. That's a real illustration of how fast Europe's PPA market is hybridising.

How do you compare price points for hybrid projects, given the wide variation between offer types?

This is a really crucial point. Of course, if I have a 30 MW solar project in Spain with a 15 MW battery, where the battery is connected only to the solar, that’s going to come with a very different financial proposition than, say, a 15 MW “grey BESS” co-located with the same amount of solar.

We acknowledge the Hybrid Index blends many structures, which is true for all indices. While we have more granular data available via our MarketPulse product, the Index aims to act as a reference for the broader hybrid market's evolution. Of course, that comes with trade offs.

Many aspects affect the Index for solar and wind, such as different tenors, contract start dates and specific contractual clauses. In the case of hybrids, BESS duration, technical aspects like “green” or “grey” connections, and of course transactable contract structures all play a role, too.

The LevelTen methodology accounts for all of these aspects, and provides a broad overview of how hybrid PPA markets are trending each quarter. For those looking for deeper detail on a market-by-market basis, our MarketPulse platform provides much more granular insights.

Which markets have seen the biggest price shifts in the last quarter, and which have been the most stable?

The biggest shifts last quarter were for Polish and German solar PPA offers, which increased by 10% and 4% respectively when comparing the 25th percentile of offer prices. Higher gas prices, and market expectations around wholesale power prices amid the ongoing closure of the Strait of Hormuz, likely played a role in both. From a long-term perspective, we see solar PPA offer prices following a consistent downwards trajectory there, as in other European markets.

In terms of stable prices, the UK and Spain were fairly steady quarter over quarter, with the latter market once again hosting the lowest solar PPA prices on the continent. Developers with pure-play solar assets in these markets are dealing with high solar supply and intense PV cannibalisation, forcing them to continue lowering offer prices to provide potential buyers with viable deals.

Finnish wind prices dropped slightly QOQ – down 1.6% – and are down only 2.2% year over year, so that market has been comparatively steady too, even as heavy wind cannibalisation pushes counterparties to explore solar and wind+storage deals.

For clean energy buyers looking to secure cheap, reliable clean energy, what would be your top recommendation right now?

My first suggestion would be to explore wind PPAs and multi-technology deals, as these consistently return the highest values for buyers. Moreover, there are hybrid deal types which actively hedge against wholesale market volatility, such as TBx. This means future price resilience for contracts, regardless of how market volatility increases or decreases in the future.

Secondly, it is essential to have access to reliable price data that accurately reflect real-world market conditions. Naturally, I would recommend the LevelTen Platform for this – LevelTen is the biggest PPA marketplace globally, but other options are out there. We published some analysis last year on just how closely our data aligns with actual market activity, and the results emphatically drive home just how precise and dependable LevelTen's data is [ed: that analysis is available here].

Finally, any buyer looking to procure energy at a competitive price should really be looking to run an RFP. This process attracts bids from across the ecosystem, with many developers submitting multiple bids for the same auction. Voluntary corporate buyers account for almost half of the deals closed on our platform, with many first-time users expressing their surprise at the quality of offers they receive, compared to previous bilateral negotiations they have run.