Germany lags other European countries in new PPA projects – report

The volume of new renewable energy projects backed by a purchase power agreement (PPA) in Germany trails that of other European countries, according to a report by energy consultancy enervis. Whereas wind PPA projects announced last year added up to four gigawatts (GW) in Sweden and 2.7 GW in Great Britain, projects in Germany added up to less than one GW. In solar PV, Spain led the field with 4.4 GW, followed by 1.9 GW in Italy and 1.1 GW in Germany. All European PPA projects announced last year added up to 21 GW.  "The interest in subsidy-free renewable projects is unabated," enervis said. "In many attractive markets, administrative hurdles curb activity," the report said.

"Wholesale power prices in Germany are simply too low in comparison to renewable projects' total costs," enervis analyst Tim Steinert told the Clean Energy Wire. "But we're on the cusp of reaching profitability." He added the end of many renewable projects' support payments after 20 years is set to boost the German PPA market because operators only need to recoup the operating costs of existing installations, but not investment costs.

PPAs are long-term contracts between a power generator and a large consumer for the supply of electricity that serve to finance the operation and/or construction of a plant. PPAs can take different forms, depending on whether the electricity is supplied physically via a grid connection to the buyer (e.g. a nearby company) or whether the purchase of the power (which is fed onto the public grid) is purely contractual because the buyer is an electricity retailer.