PPA market in Germany: Market volume quadrupled

Berlin, Germany, 16 April 2024. dena’s Renewable Energies Market Initiative presented its ‘PPA Market Analysis Germany for 2023’ today. The total volume of PPAs has increased by 323 per cent compared to the previous year (2022). Most PPAs were concluded in the photovoltaic and offshore wind segments, which are the leading technologies in the current market environment. Green PPAs are a key element of the energy transition and Germany is the second-largest PPA market in Europe after Spain.

Corinna Enders, CEO, says, ‘the figures are an impressive demonstration of the importance of PPAs for the safeguarding of prices and for the development of sustainable business models. PPAs must also play an important role in the future electricity market in order to further incentivise the competitive expansion of renewable energy. A reliable political framework is of central importance for the business development of PPAs.’  

Corporate PPAs in particular are responsible for most of the market growth. One of the reasons for this is the Corporate Sustainability Reporting Directive (CSRD), which came into force in January 2023 and increases the number of companies in Germany required to report on environmental, social and governance (ESG) aspects from 500 to 15,000. This also means that there is increasing pressure on companies to find solutions for decarbonising their business activities. In the future, this disclosed information on non-financial reporting will also become increasingly important for lenders and investors, who will be able to grant better terms for credits with increased EU taxonomy compliance and capability.

Another driver for the PPA market is the delegated act on the production of green hydrogen at EU level, which has been in force since January 2023. The conditions for the production of renewable hydrogen, hydrogen-based fuels or other energy sources as renewable fuels of non-biological origin (RFNBOs) are defined here. The required high temporal and geographical correlation calls for operators of electrolysers in Germany to conclude a PPA for the production of renewable hydrogen.

For three years now, the market initiative has been working to strengthen the expansion of renewable energies through complementary market-driven expansion. The Renewable Energies Market Initiative was launched by dena, the German Chamber of Industry and Commerce and Klimaschutz-Unternehmen e.V. Further, these institutions provide the operational support. By providing targeted, industry-specific information, it aims to demonstrate the potential of PPAs to buyers, producers, financiers and other market players, support market development and make recommendations to policymakers and industry.

Please visit https://marktoffensive-ee.de/startseite/ for further information on the Renewable Energies Market Initiative.