6 GW of Corporate PPAs in H1 2024: Germany Overtakes Spain, Driven by Industrial Off-take from Chemicals and Steel Manufacturers

updated on 08 July 2024

Surge in Germany led by Vattenfall's 800 MW Offshore Wind PPA with Chemicals Giant BASF, as well as Large-scale PPAs from Evonik, Salzgitter and Deutsche Bahn

1.4 GW of Industrial Off-take in Germany: Vattenfall Cites Rising Demand from Industrial Customers, with 10-15 year Pay-as-Produced PPAs Emerging as Standard

In Mar'24, Vattenfall stated that the demand from industrial consumers is quickly outstripping supply, consequently spurring the rise of utility-scale installations. The Swedish utility plans to market 2 TWh/year from a 2 GW of portfolio of solar assets, by 2026. Meanwhile, our data suggests that the prevalent PPA structure in the country is 10-15 year, pay-as-produced contracts, under which the buyer pays only for the off-taken output. These contracts offer reduced initial entry costs, but expose the customer to the merchant market in case of asset under-performance. However in Germany, this trade-off is low-risk, as the prices in country's wholesale market are currently at favorable levels and are expected to remain that way

1 GW of Tech PPAs in Spain: Tech Off-take to Continue Dominating in Spain, as Amazon and Microsoft Announce €20bn+ of Investments in Aragon

Amazon recently outlined plans to invest €16bn in cloud infrastructure in Aragon, simultaneous to announcing 12 new PPAs totaling 600 MW, bringing its total contracted capacity in the country to 3 GW. Microsoft quickly followed this with a plan to invest €7bn over the next 10 years in the city of Zaragoza, to expand AI and cloud computing facilities. These moves emphasize the rise of data center-led power demand in Spain, with long-term PPAs recently signed by firms including Apple, Equinix and Digital Realty. Depressed power prices in the country, attributed in part to price cannibalization, coupled with low renewables LCOEs, are believed to be major drivers of this phenomenon

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