For many organisations entering the Power Purchase Agreement market, the first question is still a familiar one:

What price can we get?

It is an understandable starting point. Long-term electricity prices remain one of the principal reasons companies consider PPAs in the first place. Fixing or providing greater visibility over a proportion of future energy costs can reduce exposure to wholesale market volatility, while purchasing renewable electricity through a long-term agreement can support wider decarbonisation objectives.

But in Europe’s increasingly complex PPA market, a price quote on its own reveals surprisingly little about whether an agreement is actually appropriate for the organisation signing it.

Two offers carrying similar €/MWh prices can expose a buyer to very different levels of volume risk, profile risk, balancing costs, basis risk and counterparty exposure. They may involve different renewable technologies, different generation profiles, different contractual durations and entirely different treatment of Guarantees of Origin. A contract that appears more expensive at first glance may ultimately provide better alignment with the buyer’s electricity consumption, risk tolerance or sustainability strategy.

This is becoming more important as the European PPA market grows.

The European Commission reports that the volume of electricity contracted through new corporate PPAs in the EU increased from 7.4 TWh in 2020 to 31.4 TWh in 2024, while the number of contracts signed rose from 60 to 276 over the same period. Yet that growth has not created a single, standardised European market. By 2024, the Commission considered 13 Member States to have mature PPA markets, seven to be emerging markets and the remaining seven to have very limited activity.

The market is therefore becoming larger without necessarily becoming simpler.

For buyers and renewable energy producers, that changes the procurement question. The objective is no longer simply to find an available PPA at an attractive market price. It is to understand which structure, market, technology and allocation of risk best fits the commercial purpose behind the agreement.

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Europe has a PPA market, but not one PPA market

A corporate buyer operating facilities across Europe may naturally view renewable electricity procurement as a regional exercise.

The underlying PPA markets remain considerably more fragmented.

Contract availability, renewable generation mix, wholesale electricity prices, support mechanisms, grid structures, financing conditions and regulatory frameworks vary significantly between countries, and sometimes within. Even the relative maturity of individual PPA markets differs substantially.

ACER, the EU Agency for the Cooperation of Energy Regulators, has highlighted this variation through dedicated PPA country analysis covering 21 EU Member States and Norway. Its assessments examine differences including PPA uptake, guarantee mechanisms, market platforms, barriers and opportunities. ACER has also stated that the availability and functioning of PPAs vary significantly across the EU because of differences in national regulatory frameworks and financing mechanisms.

The European Commission reached a similar conclusion in its July 2026 study on the renewable PPA market. While the market continues to expand, growth remains uneven between countries. The Commission identified volatile electricity prices, limited creditworthiness among some potential corporate buyers and fragmented national regulatory and market rules as three major factors holding back further development.

This fragmentation has practical consequences.

A structure that works effectively for an industrial buyer in Spain cannot automatically be replicated for a facility in Germany, France or the Netherlands. Available renewable technologies may differ. The liquidity of the local PPA market may differ. Forward-market depth, expected capture prices and the relationship between generation and consumption may differ.

Cross-border PPAs introduce another layer.

Where generation and consumption sit in different bidding zones, differences in wholesale electricity prices create basis risk. Interconnector availability and cross-border flows can further affect the economic relationship between the two markets. The European Commission specifically notes that cross-border PPAs are more complex than domestic agreements because of these price differences and transmission considerations.

This means that comparing PPA offers solely on headline price can obscure much of the commercial reality underneath them.

Before price can be evaluated properly, the buyer needs to understand what exactly is being priced.

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The contract determines where the risk goes

Every PPA contains risk. Structuring the agreement does not remove that risk; it determines how it is distributed between the producer, buyer and any intermediaries involved.

That distinction matters because renewable electricity generation rarely follows the same profile as corporate electricity consumption.

A solar installation produces electricity during daylight hours, with production concentrated during particular periods of the day and year. A wind asset follows an entirely different generation pattern. A manufacturing facility, office portfolio, logistics operation or data centre will each have its own consumption profile.

The difference between those generation and consumption curves creates commercial consequences.

A buyer might contract renewable electricity at an attractive fixed price but still need to purchase electricity from the market whenever its demand exceeds the output delivered under the PPA. Conversely, renewable generation may exceed the organisation’s requirements during periods when market electricity prices are low.

The resulting exposure can include profile risk, volume risk and balancing costs.

The structure of the PPA determines how those exposures are shared.

The European Commission explicitly recognises that the choice of PPA structure affects the allocation of price, volume, profile, balancing and credit risks between the contracting parties and, ultimately, can affect the bankability of the renewable energy investment itself.

Technology is also changing this calculation.

By 2024, solar photovoltaic generation represented the majority of newly contracted PPAs in Europe, while more than 10% involved hybrid structures combining multiple technologies, including storage.

Hybridisation creates opportunities to build generation profiles that better match demand, but it also expands the number of variables that need to be evaluated.

The buyer must consider whether solar, wind, a combination of technologies or generation combined with battery storage provides the appropriate profile. Contract duration must be considered alongside expected electricity demand. Pricing structures must be examined against forward-market expectations. Counterparty creditworthiness, project completion risk and balancing responsibilities need to be understood before they become contractual obligations lasting ten years or more.

None of this makes price less important.

It makes the meaning of the price more important.

A €60/MWh agreement with significant residual exposure cannot automatically be considered cheaper than a €63/MWh structure that more closely follows the organisation’s consumption profile or transfers particular risks elsewhere.

The relevant comparison is therefore not simply €/MWh against €/MWh.

It is the total commercial position created by the agreement.

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Regulation is becoming part of PPA design

The increasing complexity of PPAs has also attracted greater attention from European policymakers.

On 22 April 2026, the European Commission adopted Recommendation (EU) 2026/917 specifically addressing barriers to the development of PPAs and other energy purchase agreements.

The Recommendation covers issues ranging from access for smaller buyers and multi-buyer structures to credit guarantees, accounting treatment and Guarantees of Origin.

The significance is not that Brussels is prescribing one European PPA structure. In many respects, it demonstrates the opposite.

There are enough financial, regulatory and contractual barriers within the market that policymakers are actively trying to make participation easier.

Creditworthiness is one example.

Long-term renewable projects require confidence that the buyer will continue meeting its payment obligations throughout the contract. This can make PPA access difficult for organisations without sufficiently strong credit profiles. The Commission therefore recommends mechanisms including guarantee schemes, while an EU-level European Investment Bank counter-guarantee programme was launched in 2025 to support eligible corporate PPAs.

Smaller energy buyers face a different challenge. Their electricity requirements may be insufficient to support a conventional bilateral PPA economically. The Commission consequently encourages multi-buyer structures in which demand can be aggregated, potentially with a larger organisation acting as an anchor buyer. We are already seeing similar PPA structures among small-mid sized energy consumers in Italy and public utility companies in Germany.

Accounting treatment can also influence contract selection. The Commission notes that accounting requirements for physical and financial PPAs are evolving and specifically highlights differences between organisations applying IFRS Accounting Standards and those operating under national accounting frameworks.

Then there are the environmental attributes associated with the electricity.

Renewable PPAs are commonly accompanied by Guarantees of Origin. But the Commission has identified limitations in the current system, particularly where certificates provide only monthly or annual information rather than closely correlating renewable generation with the actual time and location of the buyer’s electricity consumption.

Its 2026 Recommendation therefore encourages more granular GOs, identification of the bidding zone in which electricity was generated and improved cross-border transferability. While there is a general voluntary push towards granularity in Europe, for some energy consumers like data centres and renewable fuel developers, these recommendations are transitioning into requirements.

These developments add another dimension to PPA procurement.

The agreement needs to work commercially today, but it may operate for a decade or longer in an environment where electricity markets, accounting standards, certificate systems and corporate sustainability requirements continue to evolve.

That places greater value on understanding the purpose of the agreement before entering the market.

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Market access is the starting point, not the entire strategy

There will always be an important transactional component to the PPA market.

Buyers need access to suitable renewable projects. Producers need credible offtakers. Both sides need reliable pricing information, liquidity and an efficient route to counterparties.

But as the market matures, successful procurement increasingly requires those elements to be combined with analysis before the transaction takes place.

That begins with understanding the buyer.

What proportion of electricity demand should be covered? What does the organisation’s consumption profile look like? How long is it prepared to contract? Which countries and bidding zones are relevant? Does the organisation have a technology preference? How much price exposure is it attempting to hedge? What level of volume or balancing risk is acceptable? What sustainability objective does the renewable electricity need to support?

Only after those questions are answered does a price quote become truly meaningful.

The same applies on the producer side. Developers need to understand the credit quality of potential buyers, expected contract duration, pricing structure and allocation of market risks because those factors can directly affect project financing and bankability.

This is why the distinction between accessing the market and advising on how to enter it is becoming increasingly important.

The two are not competing functions. They are increasingly complementary.

AFS Energy combines access to its European counterparty network with PPA structuring around the volumes, regions and technologies required by the client. Its approach also incorporates administrative and regulatory considerations, while its collaboration with Veyt provides access to European PPA pricing intelligence that can be analysed by market, technology and contract structure.

AFS has developed this further through an end-to-end PPA advisory framework in which engagement and strategy take place before the organisation approaches the market.

That sequence matters.

Entering the market first and determining the strategy afterwards risks allowing the available offers to define the organisation’s requirements.

An advisory-led process reverses that relationship.

The buyer first determines what the agreement needs to accomplish. Market intelligence can then establish an appropriate pricing context, counterparties can be identified and commercial terms can be negotiated around a defined set of requirements.

This becomes increasingly valuable in a European market where two superficially similar contracts may produce very different outcomes.

A PPA in 2026 can simultaneously function as an energy purchase, a long-term financial commitment, a renewable electricity strategy and a mechanism supporting investment in new generation. Depending on its structure, it can introduce or mitigate price, volume, profile, balancing, basis and credit risk.

Reducing all of that to a single €/MWh figure risks focusing on the easiest number to compare while overlooking the factors that ultimately determine whether the agreement succeeds.

The better starting question is therefore no longer simply:

“What PPA price can we get?”

It is:

“What does our organisation need this PPA to achieve, and which structure delivers that outcome at an appropriate level of risk?”

Once that is understood, price can be evaluated in the context where it belongs.

Because in a fragmented and increasingly sophisticated European PPA market, securing access to a renewable energy project is only part of the challenge.

The real objective is securing the right agreement.

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Learn more about how AFS Energy supports organisations with tailored PPA and GPA advisory, market access and contract structuring: Explore AFS Energy’s PPA & GPA solutions