Alfred Weightman on Europe's Evolving Power Purchase Agreement (PPA) Market

Orrick’s Alfred Weightman speaks with Inspiratia about the structural dynamics reshaping PPA negotiations across Europe, as the market shifts from a focus on price to a focus on managing heightened market volatility as a result of global events and the transition to a renewables-dominated power system.

While disclosed PPA activity softened in 2025 – likely driven by falling capture rates – Alfred notes that “underlying corporate demand for renewable energy procurement remains robust” and expects ”PPA volumes to stabilize in 2026, with a return to growth in 2027.”

KEY TAKEAWAYS

• Volatility as the new normal. Market volatility is now "the norm rather than the exception," driving “increased focus on negative price risk…and offtakers seeking more bespoke and shaped delivery profiles".
• Contractual positions remain firm. Alfred notes that "offtakers are already wary of their financial exposure" due to falling capture rates and so are resisting significant deviations from their standard negotiation positions regarding negative price. As a result, he says, ”sellers are increasingly using co-located storage to manage this risk.”
• Data centers driving demand. “Data centers continue to drive offtake activity in Europe, with operators actively pursuing PPAs to meet sustainability commitments and to hedge power price exposure.” Meanwhile, other sectors such as food, retail, and transport are active but "translating more slowly into executed deals due to the complexity of matching industrial load profiles with renewable generation.”
• Scope 3 and supply chain PPAs. Interest is growing in PPAs aimed at tackling scope 3 emissions, Alfred says, including large corporates entering into PPAs directly on behalf of their supply chain partners.”
• Looking ahead. Wholesale power price stabilization would “significantly improve PPA pricing certainty and deal velocity," Alfred says, though the outlook remains uncertain, given increasing renewables penetration and global conflicts. Beyond pricing, he says that ”the next 24 months may see a material shift in the structure of corporate PPAs, as many corporates begin to grapple with new hourly matching requirements that will likely come out of the ongoing GHGP scope 2 consultation".

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Thank you to our clients for making Orrick the No. 1 PPA Legal Advisor globally and across each of Europe, North America, Asia Pacific, Latin America & the Caribbean and the UK, according to inspiratia’s 2025 Full Year PPA Rankings. We are thrilled to have helped our clients close 88+ PPAs across 13+ countries, with a combined capacity of 5+ GWs in 2025.