Enerdatics observes that the continent has witnessed a 150% y/y rise in the number of utility off-take agreements signed for durations of less than 10 years. This contrasts with the traditional practice of utilities off-taking power under contracts spanning periods of 15-25 years. The UK has been spearheading this shift, accounting for ~50% of the surge in short-term PPAs signed in 2023, with Poland and Iberian nations contributing the remainder. This surge can be attributed to heightened power prices, which are prompting utilities to seek short-term contracts as a strategic maneuver to effectively address near-term power demands while avoiding excessive long-term commitments.
Illustrating this trend, EDF recently entered a 7-year power purchase agreement (PPA) with Brockwell Energy for 100% of the output from the 220.5 MW North Kyle onshore wind farm in Scotland. Situated near a former coal mining site, the project is set to provide ~630 GWh of renewable energy upon its commercial launch in early 2025. The project secured a contract for difference (CfD) in UK’s allocation round 4 (AR4) at a strike price of $50.6/MWh.
To gain a deeper insight into PPA trends at the corporate and utility-level in Europe and globally, request a trial of the Enerdatics Energy Transition PPA database today.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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