Renewables Market Outlook 2025: The Big Adjustment

The European PPA market entered an adjustment chapter in 2024, marked by record deal-making but conservative volumes due to new risks like negative prices and low capture rates. Total disclosed contracted volumes reached 15.2 GW, an 11% decrease from 2023, driven by a 59% drop in utility PPAs. However, corporate PPA deal count hit a record 316, a 14% increase, with 157 new players signing their first PPA. Price volatility stabilized, but negative prices and diverging expectations between LCOE and CfD strike prices shaped negotiations. Spain led in volumes with 4.66 GW, while Germany topped deal count. Iberdrola and Amazon retained top seller and buyer positions, respectively. Innovation in multi-technology PPAs, BESS offtakes, and multi-buyer structures emerged. Predictions for 2025 include improved contractual clarity on negative price risk, doubling of mixed-technology PPAs, compound growth in BESS offtakes, flat utility volumes, and uncertain corporate PPA growth.