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German renewables PPA market volume quadrupled in 2023

published: 2024-04-18 17:11

The German Energy Agency (dena) reported that the market volumes for renewable power purchase agreements (PPAs) in Germany nearly quadrupled in 2023, marking a 323% increase over 2022. The combined capacity for offtake between different technologies peaked at 1.1GW in 2021, declined to 0.9GW in 2022, and surged to 3.6GW in 2023. In terms of numbers, the count of PPAs nearly doubled year-on-year, with 42 PPAs signed in 2023 compared to 23 in 2022.

In 2023, nearly half of the registered volume came from solar PV, totaling 1.8GW, reflecting strong customer interest in securing solar PPAs.

One of the largest offtake agreements signed in 2023 was a 600MW PPA between oil giant Shell and German real estate company Hansainvest Real Assets. This project, which recently commenced commercial operations, currently stands as the largest European solar PV park online.

Germany emerged as the second largest PPA market in Europe after Spain in 2023.

The main driver for market growth was corporate PPAs, with 33 CPPAs and 9 utility PPAs, largely due to the Corporate Sustainability Reporting Directive (CSRD) coming into effect in January 2023. The CSRD expanded the number of companies in Germany required to report on environmental, social, and governance aspects (ESG) from 500 to 15,000, increasing the pressure to find decarbonization solutions.

In terms of sectors, information technology, particularly data centers, led CPPAs, accounting for nearly 30% of the total, followed by raw materials and telecommunications. These top three sectors alone represented over half of the PPA volume of offtakes in Germany last year.

Solar PPAs signed in 2023 often featured a 10-year term and a pay-as-produced (PaP) structure, according to the report.

Corinna Enders, chairwoman of the Board of Directors at dena, emphasized the significance of PPAs for price hedging and sustainable business models. She also stressed the importance of PPAs in stimulating the competitive expansion of renewable energy and the need for a reliable political framework for PPA business development.

Germany's increased appetite for PPAs in 2023, particularly for solar PV, reflects the growth of solar PPAs across Europe last year, with solar offtakes more than doubling from 4.6GW to 10.6GW.

Source: PV Tech

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