Google inked a Power Purchase Agreement (PPA) with the first offshore wind farm in the Netherlands, supporting its recent lifetime extension approval until 2031. Two more deals linked to older onshore wind and solar generation assets point to a new trend of PPAs supporting lifespan extensions of renewable assets in a month withrather limited activity.
Recent changes to Serbia’s renewable auction scheme incentivised the signing of the second and third PPAs in the country to date. More Serbian PPAs are expected to follow shortly.
Prices in most European wholesale markets dropped month on month as both solar and wind generation picked up. Poland and some Nordic zones made an exception with prices surging compared to April.
The Polish market in particular experienced high volatility, despite stable renewable generation and power demand in May. The trend could be linked to restricted import capacity on the interconnector with Lithuania.
Year-on-year, prices remained rather stable in key markets – a change in trend – as up to April 2025 monthly prices had delivered above last year’s equivalents.
Once again, there were exceptions with Spain and Finland showing consistently lower prices compared to May last year, while Norwegian NO1 zone saw a price boost amid increased demand and lower hydropower availability.
As German solar and wind generation surged both month on month and year on year, so did the number of negative and zero price hours, hitting a combined 138 hours – a 150 % increase compared to May 2024.
Similarly, Spain saw 269 negative and zero price hours in May – a new monthly record – with the share of negative hours versus zero price hours rising. The previous record was in April 2024 at 263 total hours.
Spanish solar production increased to 5.2 TWh, up 24 % compared with April but remained slightly below May 2024. Still, capture rates plummeted to historic lows of 18 %, underscoring the urgent need for storage capacity expansion and other forms of system flexibility.
Meanwhile, German solar production soared to 9.9 TWh last month, exceeding the record 9.3 TWh produced in July 2024. Deployment of new solar capacity has slowed down in Germany to 4.6 GW in the first four months of 2025, down from 5.4 GW added in the same period last year. Nevertheless, the country is expected to bring online around 17.5 GW in 2025, a similar amount as the record achieved in 2024.
With growing solar capacity in the next months, production is likely to hit new highs this summer.This is also expected to negatively affect capture rates for solar power generation which dropped to a new low of 33 % in May 2025 (vs. 53 % in May 2024).
Onshore wind generation in Germany rose to 7.9 TWh, up 34 % compared to April 2025 and 26 % higher year on year.Capture rates remained more resilient compared to solar, at 97 % in May 2025 (vs. 90 % in May 2024).
New onshore wind capacity additions reached 1.1 GW in the first four months of this year, up from 700 MW in January-April 2024. If the accelerated rate continues, Germany may be able to improve on the underperforming 2024 when only 2.6 GW new capacity was added. This in turn could also push onshore wind capture rates down.
May 2025 saw limited activity on the European PPA market with contracted capacity plummeting by 81 % month on month and 70 % year on year to 0.30 GW, according to Veyt’s PPA database. The number of PPAs also dropped to 16 deals recorded, four less than last month and 10 fewer than in May 2024.
The annual delivered volume fell to 1 TWh after April’s 3.85 TWh – the highest annual volume registered in a single month so far in 2025. Still, last month’s volume was on par with the figure recorded in May 2024.
Solar was the lead technology with 10 recorded deals, totaling 122 MW, followed by onshore wind with six reported deals and 126 MW contracted. One offshore wind deal for 108 MW meant that there was almost an equal split between the technologies in terms of contracted capacity.
Unlike in April when large-size deals averaging 116 MW boosted overall capacity, in May small-sized deals prevailed at an average of 28.6 MW.
On the other hand, three of the deals were linked to older solar and wind generation assets that came online before 2010, bringing the total of such deals to five since the beginning of the year. To compare, only four such PPAs were recorded in the entire 2024.
The trend outlines the increasingly important role of the PPA market to provide incentives for producers to keep assets online for as long as possible and beyond the expiration of subsidy schemes.
The UK and Ireland saw the most activity with three and two deals respectively as well as one joined UK-Irish PPA. Serbia also saw some rare activity with two PPAs announced, linked to projects that recently won Contracts for Difference (CfD).
Only one PPA was recorded in Spain last month but the country remains a leader in terms of both total signed PPAs (17 deals) and contracted capacity (1.6 GW) so far this year.
IT giant Google signed a PPA with Shell contracting renewable electricity from 108 MW Egmond aan Zee – Netherland’s first offshore wind farm which started commercial operation in 2007 with a 20-year operational permit. The deal will allow for the facility’s lifespan extension until 2031.
Up until 2017, the project received government support under the Environmental Quality of Electricity Production (MEP) scheme at EUR 97/MWh. The project also benefited from an investment subsidy worth over EUR 27 million under the Dutch government’s CO2 reduction plan.
Irish food retail company Musgrave secured a PPA with utility SSE to offtake electricity produced by Richfield Wind Farm located in Ireland and Bessy Bell 2 wind farm in Northern Ireland to supply over 100 shops as well as several offices and distribution centres.
The wind farms started commercial operation in 2006 and 2008 respectively, making the PPA crucial for their continued operation without government support.
Serbian state-owned utility EPS signed two PPAs with renewable developers Windvision and CWP for 50 MW onshore wind and 45 MW solar capacity respectively. The deals follow the conclusion of the second round of CfD auctions in the country earlier this year where developers received extra points if they committed part of the project’s capacity to PPAs.
The CfD auction was heavily oversubscribed, and the entire quota of 300 MW onshore wind and 124 MW solar capacity was allocated. Based on the auction results, we can expect a further 7 MW solar and 118 MW onshore wind to be contracted under PPAs in the coming months.
In early May, the European Investment Bank (EIB) published details on the planned corporate PPA counter-gouarantee as part of its committments outlined in the Clean Industrial Deal.
The EUR 500 million scheme aims to enable new investments in renewable energy in the EU countries, Norway and Iceland by helping midcaps and larger corporates sign guarantees on PPAs with the renewable producers to meet the lenders’ requirements.
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