In this article, we answer key questions, including:
The Veyt PPA (Power Purchase Agreement) Price Index provides daily reference prices for forecasted PPA values across 20 countries, covering three key renewable technologies:
Each reference price reflects the fair value of a three-year, pay-as-produced PPA, offering market participants a consistent way to benchmark offers, assess trends, and support decision-making.
The index is built on a foundation of daily market-traded forward prices for electricity, Veyt’s proprietary modelling of capture rates, imbalance costs, and GO prices.
The hybrid approach integrates the market’s main electricity price reference with an in-depth view of future market fundamentals.
“PPAs are one of the best hedging tools for renewable power, no matter if you’re on the buyer or seller side. But you can’t hedge against a market without understanding its fundamentals. That’s especially true in the power and GO markets, where the market signals are changing in front of our eyes as the energy transition progresses.” Lisa Zafoschnig, PPA Team Lead at Veyt.
As installed renewable capacity is increasing quickly, cannibalization affects revenues for renewable projects, system imbalances increase, and GOs gain relevance. All these factors and associated risks introduce additional layers of uncertainty and require deeper modelling to understand how they affect the real value of a PPA over time. Veyt’s models incorporate these dynamics explicitly—for example, by forecasting how increased RES capacity will affect capture rates and how to account for technology-specific imbalance costs in forward-looking PPA valuations.
Are you interested in PPA pricing? See our PPA Solution
The PPA Price Index provides a robust and unbiased reference point for valuing PPAs and confidently discussing prices. This reference is especially valuable in a market where most deals are negotiated privately, and transparency is limited.
At its core, the Veyt PPA Price Index answers a question faced by everyone entering PPAs: What is the actual value of the electricity and GOs in the market?
In addition, the PPA index is updated daily, helping users track market movements over time and stay informed throughout negotiations processes.
Benefits for PPA Buyers
Benefits for PPA Sellers
Benefits for Analysts
The Veyt PPA Index works alongside other analytical tools to simplify and improve five steps in a PPA valuation process:
Assess market sentiment with price quotes
The initial step in PPA valuation involves establishing a clear perspective on current market sentiment. Before engaging in detailed discussions or preparing comprehensive offers, it’s helpful to get a view of prevailing prices and set expectations. You want to know “What are similar offtakers willing to pay, or sellers expecting to get, for comparable deals in today’s market?”
Veyt provides regularly updated price quotes, offering an immediate and objective gauge of the market’s current pricing levels across renewable technologies and geographies. This price reference helps participants align their initial expectations and receive offers with actual market realities.
Benchmark offers against index reference values
Following this market assessment, a critical next phase involves a rigorous comparison of any proposed PPA terms against a robust benchmark. When evaluating an inbound offer or structuring an outbound proposal, a common question arises: Does this price appear overvalued or undervalued relative to the fundamental market value of the electricity and Guarantees of Origin (GOs)?
The Veyt PPA Price Index addresses this by providing independently derived reference values. These enable a clear and consistent comparison, helping to identify pricing gaps and support well-informed PPA decisions.
Deconstruct price drivers
Part of a comprehensive PPA valuation involves understanding the price drivers rather than focusing solely on a single headline figure. This includes several key elements: the base electricity price, capture costs, imbalance costs, and the value of GOs.
Veyt explicitly models and incorporates these components within the PPA Index. By understanding this granular breakdown, stakeholders gain a stronger basis for negotiation and a more thorough ability to assess the inherent risks within the contract.
Track the price through the PPA negotiation
Negotiating a PPA typically takes months and years. At some point in this process, a pricing rule is established between buyer and seller. More often than not this rule is based on traded power prices. The actual price level in the final PPA text will then only be calculated upon signature of the final contract.
The Veyt PPA Price Index is a reliable and relevant tool to provide timely updates to internal valuation models and management reports on the development of the expected final PPA price.
Conduct project-specific and locational analysis
Finally, for the most accurate valuation, it is essential to incorporate both the locational characteristics of a project and the detailed terms of the proposed PPA. While the Veyt PPA Price Index provides a reliable benchmark for market-based fair value, actual contract prices can vary significantly depending on factors such as contract duration, structure, and start date — in addition to project-specific elements like technology, location, and local capture or imbalance costs.
To support this level of analysis, Veyt offers a PPA Calculator that enables users to price PPAs based on specific commercial and technical parameters of a given project. This step is critical for evaluating agreements before the deals are signed.
Request a tailored demo of Veyt’s market intelligence platform and discover how our data can support more accurate, confident PPA valuations.
The Market Price Index, Market Liquidity Index, and Market Quotes are now available to all Veyt subscribers on the online platform under the “Market Prices” section.
Veyt specialises in data, analysis, and insights for all significant low-carbon markets and renewable energy.
