PPA demand soars in Germany

German industrial demand for green power purchase agreements far outstrips supply, stimulating large-scale solar development.

Share:

PPAs verts Allemagne hausse

German industry’s interest in green power purchase agreements (PPAs) is currently outstripping what suppliers can offer. Vattenfall plans to market 2 TWh/year from 28 major German solar projects by 2026. This increased demand reflects a growing awareness of the need for an energy transition, despite the challenges posed by fluctuating energy prices and regulatory complexities.

Impact of Regulatory Reforms

EU electricity market reforms, notably the simplification of state guarantees for PPAs, are expected to provide fresh impetus to the PPA market in Germany. These regulatory developments, combined with robust industrial demand for renewable energies, create an environment conducive to rapid growth in the solar sector, despite the uncertainties associated with wholesale energy prices.

The rise of large-scale solar power

Germany has added a record 14 GW of solar capacity by 2023, affirming its position as European market leader in renewable energies. Vattenfall’s large-scale solar projects, which are free from state support and operate on a merchant basis, illustrate the sector’s adaptability and responsiveness to market demands and consumer preferences for local, sustainable energy sources.

Wind and Solar Market Differentiation

The market for onshore wind power in Germany has evolved differently from that for solar power, with the emphasis on long-term support via calls for tender. However, the persistent demand for solar APPs, particularly from large industries, underlines a fundamental trend towards diversifying and securing renewable energy sources, despite the distinct regulatory and development paths of wind and solar.

The potential of PPAs in Germany is estimated at 192 TWh/year by 2030, representing a quarter of national electricity demand. This outlook, supported by strong industrial demand and favorable regulatory reforms, positions PPAs as a key pillar of Germany’s energy transition, offering a pathway to decarbonization for companies of all sizes.

Offshore drilling company Borr Drilling Limited announced the completion of an initial tranche issuance of 30 million ordinary shares out of the planned 50 million, raising $61.5mn towards the total goal of $102.5mn.
EDF announces a new internal organization with key executive appointments to enhance decision-making efficiency and expedite the revival of nuclear and hydroelectric projects central to its industrial strategy.
Rubis announces half-year results of its liquidity agreement managed by Exane BNP Paribas, totalling 241,328 shares exchanged for an aggregate amount of €6.5mn in the first half of 2025.
Chinese oil giant CNOOC Limited appoints Zhang Chuanjiang as chairman, entrusting this experienced engineer to head the group's board of directors, strategic committee, and sustainability committee from July 8.
PTT Oil and Retail Business announces a 46% increase in net profit for the first quarter of 2025, driven by regional expansion in its energy and non-energy activities, alongside an integrated ESG strategy.
Shell revises downward its forecasts for the second quarter of 2025, anticipating notably a decline in Integrated Gas and Upstream segments, impacted by reduced volumes and lower profitability in several major activities.
The Luxembourg-based group will handle engineering, procurement, commissioning and installation of flexible pipelines and umbilicals to link a new field to Egypt’s existing offshore infrastructure, with offshore work scheduled for 2026.
British firm Octopus Energy is considering a £10 billion spin-off of Kraken Technologies, involving an upcoming minority stake sale, and has initiated preliminary discussions with banks to oversee the strategic operation within the next year.
Investment fund Ardian finalises its takeover of Akuo and appoints former Électricité de France executive Bruno Bensasson to steer the renewable-energy developer’s growth towards five gigawatts of installed capacity by 2030.
TotalEnergies acquires 50% of AES' renewable portfolio in the Dominican Republic following a previous purchase of 30% of similar assets in Puerto Rico, consolidating 1.5 GW of solar, wind, and battery storage capacities in the Caribbean.
TotalEnergies is selling half of a 604 MW Portuguese energy portfolio to the Japanese consortium MM Capital, Daiwa Energy and Mizuho Leasing for €178.5mn, retaining operation and future commercialisation of the assets concerned.
Q ENERGY France secures a bank financing of €109 million arranged by BPCE Energeco to build four new energy production facilities, totalling 55 MW of wind and solar capacity by the end of 2024.
Shell announces amendment of two annual reports after notification by Ernst & Young of non-compliance with SEC auditor partner rotation rules; however, financial statements remain unchanged.
The Financial Superintendency of Colombia approves an amendment to Ecopetrol’s local bonds and commercial paper program, enabling issuance of sustainable, indexed, or in-kind repayable instruments.
ABO Energy is selling its subsidiary ABO Energy Hellas and an energy project portfolio of approximately 1.5 gigawatts to HELLENiQ ENERGY Holdings, thus refocusing its strategic resources towards other markets, notably Germany, without major financial impact anticipated for 2025.
Iberdrola announces a supplementary dividend of €0.409 per share for 2024 under the "Iberdrola Retribución Flexible" programme, bringing the total annual remuneration to €0.645 per share, representing a year-on-year increase of 15.6%.
BHP has signed contracts with COSCO Shipping to charter two ammonia-powered Newcastlemax bulk carriers, primarily for transporting iron ore between Western Australia and Northeast Asia starting from 2028.
CBAK Energy and Anker Innovations jointly launch a battery cell manufacturing facility in Malaysia, with a commercial potential estimated at $357 million, further strengthening their strategic partnership in the lithium-ion battery sector.
German energy group Badenova plans to invest $4.64 billion in its energy networks and capacity by 2050, including $232 million committed from 2025, according to the company's recently published annual financial results.
ORIX announces the sale of the majority of its stake in Greenko to AM Green Power and commits a new USD 731mn investment in the Luxembourg-based AMG holding, confirming its strategic repositioning in next-generation energy.