On 22 April 2026, the European Commission published their new recommendation on removing barriers to wider PPA deployment. It follows a public call for evidence earlier this year and expands upon the earlier Commission recommendation on facilitating PPAs, which was adopted in May 2022.
Although planned way ahead of the start of the US-Israeli war against Iran, the conflict had increased anticipation of the recommendation, as PPAs could play a central role in alleviating the impact of the current energy crisis. Furthermore, the recommendation should be viewed against the backdrop of the first contraction of the European PPA market in 2025 after years of sustained growth.
The recommendation identifies three types of barriers hindering the wider adoption of PPAs: regulatory and non-regulatory barriers, and those rooted in broader market dynamics.
The first example of regulatory barriers are the potentially complex accounting rules surrounding the operational implementation of corporate PPAs, e.g., the classification of virtual Power Purchase Agreements (VPPAs) as financial derivatives. The Commission further points out general obstacles to renewable asset development such as permitting processes and grid access.
On the non-regulatory side, limited market access for small and medium enterprises (SMEs) is identified as one of the key issues. Smaller players often face challenges in using PPAs for price hedging and renewable energy procurement due to resource constraints, credit worthiness requirements or simply insufficient demand to contract with large renewable assets. In addition, the text mentions the absence of public buyers from the market and a potential lack of transparency and standardisation as non-regulatory hurdles.
Finally, the Commission flags several market dynamics working against broader PPA uptake. Apart from illiquid forward markets which can make price discovery more challenging, there are also potentially distorting effects of subsidy schemes on the PPA market. The most significant driver, however, is the increasing price cannibalisation and number of negative price hours due to the lack of flexibility in the power system and simultaneous generation from renewable assets.
To address these barriers, the Commission laid out the following recommendations to Member States:
Ensure that distortions to the PPA market, such as lowered liquidity or cross-subsidisation, are avoided when adopting or modifying support schemes for renewable electricity assets.
Promote awareness of multi-buyer PPAs and facilitate the aggregation of demand of smaller market players. Multi-buyer PPAs could combine SMEs with larger anchor clients to ensure that overall demand is large enough and counterparty risk is reduced. These larger buyers could be public entities, which are encouraged to procure their electricity consumption through PPAs. Furthermore, when developing national schemes for credit guarantees to reduce credit issues for SMEs, these should be aligned with the existing European Investment Bank’s guarantee instrument.
Remove any potential barriers to the development of voluntary market platforms to promote transparency and liquidity. In addition, a review and potential simplification of the current accounting treatment of PPAs is encouraged, incorporating the views of stakeholders on the matter.
Facilitate the issuance and transfer of GOs with a time granularity of 15 minutes (in line with the transition from 60 to 15-minute time interval in the day-ahead market coupling introduced in late 2025) and geographical granularity at the bidding zone level.
Furthermore, GOs should also be issued for renewable electricity provided by BESS assets. While standalone BESS assets with verified 100% renewable energy are not explicitly excluded, in practice this provision will primarily affect co-located assets and hence hybrid PPAs (RES + BESS).
PPAs
The latest recommendation was received by many market participants as an encouraging sign, as it addresses some of the most pressing barriers to further growth in the European PPA market. This comes at a critical time as heightened price volatility driven by geopolitical uncertainty makes the case for increased PPA adoption as a risk management tool for corporates.
Especially the proposal of allowing GO issuance for renewable electricity provided by BESS assets could simplify the uptake of hybrid PPAs, addressing the issues of cannibalisation and negative prices. The measures aimed at broadening SME participation could likewise play an important role in reviving corporate PPA demand.
On the other hand, the Commission’s recommendations are non-binding and do not require any immediate action from Member States, so question marks as to when and how these measures are incorporated into national law remain.
The EU currently has a list of legislations aimed at promoting PPA uptake such as the Electricity Market Reform, the RFNBO Delegated Act or the Corporate Sustainability Reporting Directive.
GOs
The Commission’s recommendation embraces GO granularity and at the same time moves beyond hourly resolution to quarter hour resolution.
Granular GOs are enabled by the EU legislative framework through the Renewable Energy Directive (RED) and the European Energy Certificate System (EECS) standards. While the AIB supports sub-hourly matching, most Member States are yet to fully transpose the RED III provisions to accommodate sub-MWh issuance. Only a few countries, including Sweden, Switzerland, and Portugal support 15-minute production data for GO issuance.
EU legislation guides towards granular GO use via the renewable hydrogen production rules (hourly-matched electricity consumption required after 2030) and the proposed data centre delegated act (timestamping at 15-minute interval). On the voluntary side, the Greenhouse Gas Protocol Scope 2 guidance has suggested hourly-matched electricity consumption. However, currently not all national registries have the IT capability to record data at this level of granularity. Elsewhere, only granular GO pilots exist.
Until the GO market fully transitions to a granular system, it may effectively split into two segments: one where participants continue with less strict annual matching (or none at all), and another where players adopt (sub)hourly matching. This fragmentation, both in demand by technology and by origin, could increase price volatility, with certificates generated during periods of low renewable output commanding higher prices.
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