PPA – the megatrend in renewable energy marketing

Axpo has a leading role in the international PPA business. But what is a PPA, and why is demand growing so rapidly?

PPAs combat climate change

Long-term power purchase agreements (PPAs) are one of the most important areas of growth in the energy sector. Following the reduction or elimination of state subsidies and sharply falling production costs for new plants, PPAs for renewable energies have become a megatrend in many parts of Europe. These agreements enable the development of new green electricity generation without relying on subsidies, help power the energy transition, and support the fight against climate change. Many plants would not exist without PPAs. 

Domenico De Luca, Head of Trading & Sales at Axpo, explains: "In many countries in which Axpo is active, renewable energy investors and producers are looking for power consumers who will give their projects investment and price security. At the same time, a growing number of energy intensive industrial companies are seeking to procure electricity from renewable sources on a long-term basis, in line with their sustainability strategies. PPAs are a driver of the energy transition and Axpo plays an important mediating role between producers and consumers. We intend to continue expanding this business in the future."

Under its ‘Ambition 2030’ initiative, Axpo has set itself the goal of quadrupling its long-term purchase and supply contracts for electricity from renewable energies by the year 2030.

PPA for Fântânele-Cogealac-Gradina wind farm in Romania
PPA for Energix's Banie III and Sepopol wind farms in Poland

How big is the PPA potential?

The European Green Deal sets ambitious targets for 2030: reducing CO2 emissions by 55% and 32% more renewables in the energy mix. Based on ENTSOE’s 2022 scenarios, Axpo has calculated that, on average, wind farms and solar plants with an installed capacity of 60 gigawatts need to be built each year to meet the EU’s 2030 Green Deal targets. A huge amount, representing a 270% increase in installed capacity. Investors and producers of green electricity are increasingly looking for buyers to ensure price certainty in their projects. On the other hand, more and more companies want renewable energy to decarbonise. This is where Axpo comes and provides on-the-ground support as well as effective, sustainable solutions.

What is the PPA situation in Switzerland?

To date, there are very few opportunities for PPAs in Switzerland as electricity is mainly produced from a mix of nuclear and hydropower and there is a very low number of large-scale wind and solar installations in the country.

At the beginning of 2021, however, Axpo concluded the first ever PPA in Switzerland for AlpinSolar, the largest alpine solar plant in Switzerland, located on the Muttsee dam. Supermarket chain Denner will buy the plant’s solar power for 20 years under a long-term corporate PPA. Without this agreement, AlpinSolar could not have been developed.

Domenico De Luca comments: "In comparison to other European countries, the Swiss PPA market is still at an early stage. However, we are seeing a steady increase in demand here, particularly from energy-intensive industrial companies that want to source their power needs from renewable energies. Axpo is ready to support these companies."

PPA with Nestlé Switzerland for the Mauvoisin hydropower plant
PPA AlpinSolar in Switzerland

What role does Axpo play in the international PPA business?

Axpo’s deep PPA expertise has been helping its corporate customers reduce their CO2 emissions for more than 15 years. Leveraging its strong presence in some 40 markets in Europe, the USA and Asia, Axpo has taken a leading role in the international PPA business.

PPAs have been well established for many years, particularly in Scandinavia and the Iberian Peninsula, and Axpo is among the leaders in this area. An increasing number of PPAs are also being concluded in other European countries such as Poland, France, Benelux, the UK and Italy. In contrast, Germany was not an attractive market for PPAs for some time. However, this has been changing since the beginning of 2021 with the expiration of EEG subsidies for many plants.

PPA for Trillo solar park and Berry Global in Spain
PPA for Tonge solar park (Voltalia) in England

Media releases on PPAs

05.05.2022

Axpo Polska unterzeichnet PPAs mit Mirova und Uriel für zwei neue Windparks in Polen

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11.04.2022

Solar PPA with ENERPARC: Axpo Deutschland to market electricity from PV plant in Büttel

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08.04.2022

Axpo Nordic and Low Carbon sign balancing PPA for Mörknässkogen wind farm

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30.03.2022

Axpo Italia signs two long-term PPAs with Canadian Solar

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21.02.2022

Axpo Deutschland signs PPA with Obton A/S for Klatzow solar park

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15.02.2022

Axpo Polska signs 9 year off take agreement for GIGs Scieki wind farm

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09.02.2022

Axpo signs PPA with Nestlé Switzerland for Mauvoisin hydropower plant

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03.02.2022

Axpo signs wind farm PPA with Umicore in Belgium

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31.01.2022

Axpo supplies Nestlé with electricity from German wind farms

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19.01.2022

Axpo signs a PPA with R.Power Group for nearly 300 MWp of solar power in Poland

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26.11.2021

Axpo signs long-term PPA for three wind farms in Lithuania

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02.11.2021

Axpo signs wind and solar balancing services contract with SNCF Energie in France

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21.10.2021

Axpo US executes PPA with Cypress Creek on 270MW Texas solar project

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15.09.2021

Axpo UK signs long-term PPA for new Slough Multifuel energy-from-waste facility in England

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08.09.2021

Axpo signs wind farm PPA with Borealis in Belgium

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24.08.2021

Axpo signs landmark PPA for Europe’s largest operational onshore wind farm in Romania

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29.07.2021

Axpo Iberia and Azora Capital sign PPA for a wind farm in Cuenca

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28.07.2021

Axpo Iberia and Aquila Capital sign PPAs for 25 MW solar portfolio in Portugal

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17.06.2021

Axpo UK and Voltalia sign a 10-year fixed price PPA for a solar park in England

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07.06.2021

Axpo signs Sweden’s first market-based solar PPA with Sparbanken Skåne solar park

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25.05.2021

Axpo Iberia and Grupo Enhol sign a 5-year PPA for new wind farm in Navarra

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18.05.2021

Axpo Iberia signs solar PPA with Berry Global

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05.05.2021

Axpo Polska signs PPA with Energix Group for two wind farms in Poland

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13.04.2021

Axpo signs two 10-year PPAs for wind farms in Sweden

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25.02.2021

Axpo signs a 10-year green power deal with GIG and Danone companies in Poland

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08.10.2020

Axpo Benelux signs PPA for Belgium’s largest onshore wind farm

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02.10.2020

Axpo Iberia signs 150 MW long-term PPA with Solaria

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19.05.2020

Axpo and Green Investment Group extend PPA cooperation to Norway

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15.01.2020

Axpo signs deal for energy supply and market access with Valda Energy

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29.10.2019

Axpo signs long-term PPA for two wind farms in Finland

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26.07.2019

Axpo implements PPA in the German solar market for the first time

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12.06.2019

Axpo concludes another long-term PPA for a wind farm in Sweden

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19.04.2019

Axpo and the German investment firm Aquila Capital ink long-term PPA for two wind farms in Sweden

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02.04.2019

Axpo and re:cap global investors conclude long-term PPA for Swedish wind farm Bröcklingberget

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