European countries have seen an average price increase of 22.2% in power purchase agreements (PPAs) between the end of March and end of April, according to Pexapark’s Pexa Euro Index. Uncertainty around the Russia-Ukraine conflict and security of energy supply are leading to price rises for 10-year PPAs, with most of the countries tracked recording gains.
The biggest rises were in France and the Netherlands with 33.6% and 31.9% increases to €120.70 per MWh and €104.40/MWh, respectively, PPA consultancy Pexapark’s monthly report said. Prices in Italy rose 29.7% to €105.20/MWh and in Germany by 27.5% to €109.40/MWh.
A 17% increase to €129.70/MWh was recorded in the UK, the Nordics saw a 15.3% rise to €44.20/MWh and prices in Poland rose 2.1% to €124/MWh. Portuguese prices remained flat at €44/MWh and in Spain they fell by 0.1% to €44.60/MWh.
“The situation on the short end of the forward curve remains tense and unpredictable. There is ongoing uncertainty around Russia’s reaction when large utilities fail to meet Russia’s [rouble] payment demands, while the EU Commission has signalled that it will consider compliance with these demands as a breach of sanctions,” Pexapark wrote.
“The impacts of the crisis have started to spill over into the longer end of the forward curve this month, in contrast to last month, when the impact of high gas and coal prices on power remained limited to the front and second-year contracts. Now, we see the geopolitical impacts affecting the back end of most European forward price curves.
“Market participants are anticipating continued strain on the gas supply/demand situation in Europe, with little hope expressed in the markets for a quick return to the old low-price environment. The tightening of the carbon market is additionally impacting forward power prices along the entire curve.”
