PPAs in the Spanish PV Market 2018

During this 2018, the large volume of investment in the development of photovoltaic projects, throughout the country, has once again positioned Spain as a benchmark worldwide, in full energy transition and with the goal of renewable energy in 32% for the 2030 across the EU. Due to the absence of new Auctions in the short term (except in the Balearic Islands and the Canary Islands), one of the keys that has positively impact on the photovoltaic sector in Spain, has been the sign of PPAs (agreements of purchase of energy).

Although at the international level PPAs have been signed daily and for many years, in Spain the first PPA was signed on July 24, 2017, between the EDP Group and Calidad Pascual (for a period of 5 years) and since then, more than 10 PPA agreements have been announced, most of them materialized in 2018.

Main photovoltaic projects signed in Spain in 2018, with PPA for 10 years or more

  • One of the main projects being developed in Spain, called "Don Rodrigo", is located in Seville and has a capacity of 174MWp. The installation, which will produce 300GWh annually, is being built by the German company BayWa r.e, which in April 2018 signed a PPA for 15 years with the energy group of Norwegian origin, Statkraf.

  • Two other projects highlighted in Spain are those that the company X-ELIO (KKR Group) is developing in Murcia, each 50MW of which will produce more than 200GWh annually. Both projects also include the agreement of a PPA for 14 years, signed with the Spanish trading company Nexus Energía.

  • Iberdrola, which has extensive experience in signing PPA contracts in international markets, such as in the United States and Mexico, has also opted to return to the Spanish market and has done so with the acquisition of the largest photovoltaic project in Europe, called "Núñez de Balboa". For this megaproject in Extremadura of 431MW (expandable to 500MW), the company has reached an agreement to sign a PPA for 10 years, with the bank Kutxabank

  • The company of Israeli origin, Ellomay Capital, owner of the megaproject in Cáceres of 300MW and denominated "Talasol", has signed in 2018 its first financial PPA in Spain, for a period of 10 years and published in (ISDA). The expected annual yield is approximately 500 GWh

  • One of the last projects signed in 2018 belongs to the Spanish company Holaluz, its first PPA agreement for a period of 10 years with the engineering company Raiola Future that will develop 10 photovoltaic plants between Spain and Portugal of 20 MW. Continuing with its strong rate of growth, Holaluz has started in 2019, closing with EDF Solar a photovoltaic PPA agreement for the start-up of 120 MW in three years between Spain and Portugal. The agreement involves an investment of close to 80 million euros and a global production of 190 GWh.


Other projects in Spain, with PPA agreement.

Solaria recently announced the signing of its second PPA with the oil company Repsol, of 7 years' duration and for a total power of 102MW. These two agreements signed with Solaria are the first signed by Repsol with a company in the renewable energy sector.

In addition to its recently launched energy trading activity, the oil company Repsol has also acquired in 2018 the photovoltaic project called "Valdecaballeros", one of the largest projects developed in Spain, with 264MW of power.


The PPA provides a clear added value to a photovoltaic project.

• The most important value is clearly "the bancability", which means that the PPA is a key element to be able to obtain a bank financing in optimal market conditions, since it allows calculating the future cash flows during a period determined, in the absence of incentives by the Central Government.

• It provides a contract according to the needs of the energy market demand.

• It ensures a stable sale price of electricity, over a long period of time.

• Allows the buyer to set their electricity supply costs in the medium and long term.


Last conclusion

The PPA has become, therefore, as a relevant factor to boost the development of new renewable energy projects in our country, which otherwise would surely not be able to obtain the necessary financing for its implementation.

However, there is still a long way to go, to improve and normalize this type of agreements, so beneficial for all the parties involved in the projects.


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