Are you ready for 2030?

As a leader in integrating renewables in the energy market, we match supply from our own and other producers' assets all over Europe with industry demand. We strongly believe that we are ready for 2030. But we also know that it won't be easy. 

Let’s be realistic: we have a big task ahead of us in Europe. Over the past couple of years, Europe has faced unprecedented challenges in our energy supply, marked by a significant level of instability. The pandemic, skyrocketing energy prices, social unrest, Russia's invasion of Ukraine, and their withholding of crucial gas exports.  

To address these issues, alternative energy sources—especially renewables and green hydrogen—are essential. Europe requires substantial amounts of renewable energy, and we need it quickly. Power Purchase Agreements (PPAs) serve as the best accelerator in the expansion of renewables and green hydrogen in Europe.  

Net-zero powered by PPAs  

Thanks to a well-functioning PPA market, we have witnessed the construction of close to 60 GW of renewable plants since 2018, all without subsidies*. PPAs have proven to be a customer-oriented solution, especially in these volatile, uncertain times when long-term predictability and stable prices are important for both generators and consumers. Additionally, PPAs serve as an important means for industrial companies to reduce their CO2 emissions. 

Currently, both Contracts for Difference (CfDs) and PPAs are necessary and must be compatible. However, the real innovation lies in a functioning market.

3 things to consider  

1. There needs to be an acceleration in the permitting of new wind and solar projects and boosting of storage capacity.  

2. Stabilise regulation and regain trust in the market. The market is strong and capable of producing efficient solutions. It is crucial that CfDs and PPAs can coexist, However, Cfds, must, under no circumstances, slow down the PPA market. 
3. For the ramp-up of the hydrogen markets, there must be available and reliable infrastructure that is accessible in a just and non-discriminatory manner. Additionally, there must be sufficient physical supply, and the demand for hydrogen needs to ramp up swiftly. Plus, we need to do this quickly! To secure the physical hydrogen supply, hydrogen producers should fully leverage renewable production for hydrogen generation. Intermediaries such as Statkraft can help with this. Therefore, it is key that PPAs or green hydrogen production can be managed through intermediaries. 

Author: Sascha Schröder, VP Origination, Central Europe
Source: Pexapark European 2024 PPA Market outlook