European Day-ahead prices shed value month on month in March 2025 as weather-driven demand subsided but remained elevated compared to March 2024 across most markets safe for the Nordics. Lower wind production and relatively high carbon and gas prices compared to the same time last year appeared to be the main bullish drivers.
The German average spot price settled at EUR 93.4/MWh, more than 50 % higher compared to March 2024. At the same time, strong volatility persisted with 25 negative price hours registered up from zero last month and 21 hours in March last year, with the minimum hourly price plummeting to EUR –235.6/MWh – the lowest since November 2024.
German onshore and offshore wind produced 39 % and 31 % less respectively year on year. The resulting lower simultaneous production continued to boost capture rates for both technologies to above 90 % last month.
At the same time, German solar production more than doubled month on month and rose by 30 % compared to March 2024. This in turn pressured capture rates to 56 % – nearing the lows seen last summer.
On the other end of the spectrum, Sweden’s SE2 zone hit an average spot price of EUR 10/MWh, down 80 % year on year. This came amid 189 negative price hours – the highest number of such hours in all of Europe last month as onshore wind generation surged to 1.73 TWh, up 75 % year on year.
Spain also registered its first negative price hours for the year – 48 hours in total compared to none in March 2024. However, zero price hours decreased to 24 down from 134 in March last year.
Spanish onshore wind capture rates rose to 97 % compared to 60 % in March 2024 despite an 11 % uptick in production year on year. Solar capture rates remained relatively stable year on year at just above 49 %.
In March 2025, Veyt recorded 24 deals, one more than at the same time last year and three less month on month. Contracted capacity stood at 1.08 GW, 35 % higher than March 2024 but still below the 1.7 GW registered last month.
The estimated annual volume remained on the low side at 1.5 TWh down from 3.3 TWh in March 2024 as solar was the prevailing technology, while lack of capacity information on an offshore wind PPA in the UK also affected the value.
As mentioned above, solar remained the preferred contracted technology with 12 deals recorded totaling 650 MW. Onshore wind attracted seven deals, two more than at the same time last year but overall capacity stood at only 178 MW.
Spain and France recorded their first and second to date hybrid PPAs, respectively as both markets are working on expanding storage capacity. Previously, hybrid PPAs were almost exclusively signed in the UK as the country has the most mature battery market in Europe.
However, we expect to see other markets registering more hybrid deals as the technology gets rapidly integrated to combat negative price hours and renewable production curtailments across the continent.
Hybrid solar projects can achieve around 10 % lower Levelised Cost of Energy (LCOE) compared to standalone commissioning of individual components,according to a recent report by Solar Power Europe.
Installed Front-of-the-Meter storage capacity in Europe reached 89 GW in 2024, up 60 % year on year, according to a report by the European Association for Storage of Energy (EASE).
EASE expects another 8 GW storage capacity to come online in 2025 with the UK, Germany, Italy and Greece leading the trend. Spain, Poland and the Netherlands are also expected to grow their commercial storage capacities in 2026 when over 15 GW in total are to be installed across Europe.
Italy and Spain shared the spot as the most active markets with four PPAs each recorded in March 2025. Italy contracted almost 400 MW worth of PPAs, while Spain remained second with 237 MW contracted. Germany and France recorded three PPAs each, but contracted capacity remained on the low side at just above 100 MW for both.
The first quarter of 2025 saw 78 PPAs recorded, flat year on year, suggesting a sustained market interest. However, contracted capacity (3.5 GW) and annual volume (4.9 TWh) remain lower year on year. In Q1 2024, a total of 4.8 GW were contracted with 13.4 TWh annual volume. Lower average deal size compared to the same period last year (58 MW vs 82 MW) appears the main driver.
The trend of seeing lower deal sizes is expected to continue as big buyers diversify their portfolios by stacking PPAs or reduce activity, while smaller offtakers emerge.
Spain has retained its number one position with 13 PPAs totaling 1.5 GW so far this year. Italy has come second with 11 PPAs and 565 MW contracted. We expect interest in the Italian PPA market to grow after a successful first round of the Energy Release scheme for energy-intensive industries and new compensations for curtailed solar production, among others.
Germany was the third largest market in terms of capacity at 336 MW but slipped down to fourth place in terms of deal count – 9 PPAs in total registered.
Data4, European provider and investor in the data center sector, secured its third to date PPA, this time in Italy. Italian utility Edison will supply power to Data4 from a newly built 148 MW solar farm which will cover around 10 % of the company’s energy consumption in the country. Last year, Data4 secured one solar and one onshore wind PPA in France, totaling 101 MW, according to the Veyt PPA database.
Renewable investor Nexwell Power signed the first hybrid PPA in Spain with an unnamed US technology company. Under the 14-year deal starting in 2026, Nexwell will deliver a total of almost 3 TWh from a 145 MW solar farm with an integrated utility-scale battery. The agreement includes provisions for a potential incremental supply of an additional 2 TWh.
Utility RWE locked in a 10-year PPA with data centre service provider Telehouse for delivery of an undisclosed volume of electricity produced by the 630 MW London Array offshore wind farm. The facility will be supplying power to Telehouse’s London Docklands campus, Europe’s most connected data centre hub.
Croatia registered its third-to-date PPA between utility AXPO and Croatian manufacturer of cleanroom systems Klimaoprema.
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