Power purchase agreements (PPA)

Do you know what a PPA is and what its main advantages are?

Long-term energy purchase agreements are a model that provides buyers with price stability when purchasing renewable energy for their businesses.

What is a PPA?

A PPA (Power Purchase Agreement) is a long-term clean-energy supply agreement from a specific asset at a fixed price between a renewable developer and a consumer – usually companies that need large volumes of electricity – or between a developer and a retailer that will resell the energy. Signing a PPA can be seen as selling a project and its environmental attributes (Guarantees of Origin). It is a commitment that enables the renewable developer to make an investment decision based on profitability versus risk and/or to secure the financing needed to build the project.

Iberdrola, a leader in PPAs

The Iberdrola Group has extensive experience in this area and manages these contracts in countries such as the United States, the United Kingdom, Spain, Portugal, Germany, Italy, Poland, France, Brazil and Australia. It has already signed agreements with Amazon, Meta, Mercadona, Apple, T-Mobile, Mercedes-Benz, Salzgitter, Air Liquide, Bayer, Google, Renault, the Volkswagen Group, Auchan and AB InBev, among other companies.

For the third year running, Iberdrola appeared as the top seller in Europe in the report published by Pexapark titled Renewables Market Outlook 2026.

1,251 MW

A 38% increase in publicly announced capacity compared with the previous year.

+15

Publicly announced agreements in 2025, up 67% on the previous year.

The PPA market closed its second-best year in 2025, with 55.9 GW of energy signed through long-term contracts, according to the 1H 2026 Corporate Energy Market Outlook 2026 report. The United States continues to be the region with the highest number of these agreements signed, in most cases driven by its business fabric, which is heavily based on large global technology companies. Companies such as Meta, Amazon, Google and Microsoft accounted for 76% of these corporate agreements, reinforcing a clear trend in the market: data centres and AI are seeking diverse energy sources to sustain their high demand.

In their search for a portfolio of services that guarantees a stable supply, these companies are opting for a hybrid portfolio. At Iberdrola, we have a broad portfolio of projects including offshore and onshore wind, hydroelectric power, photovoltaic solar energy and battery storage, all located in strategic geographical areas to ensure a constant supply of emissions-free energy.

Types of PPAs

There are several types of PPAs depending on the point where the energy is injected:

Onsite PPA

In this type of agreement, the generation facility is installed on the buyer’s premises or close to them and is connected to its own network.

Offsite PPA

In this type of contract, the generation facility is located away from the buyer. It is therefore not physically connected to the facility but to the electricity grid.

Off-site PPAs on the point of delivery of the energy

Physical PPA: The developer sells renewable energy to an end customer through a retailer, which supplies both the energy generated by the plant and any additional energy needed to meet the customer’s consumption.
Virtual PPA: The customer locks in the energy price directly with a renewable developer (PPA price). Separately, the customer contracts its electricity supply with the retailer of its choice.

Off-site PPAs on how the energy is delivered

As-generated PPA: The customer consumes the gross generation from the plant. This has historically been the most in-demand product.
Baseload PPA: The renewable developer converts the plant’s gross generation into a baseload supply.

Iberdrola has extensive experience in the PPA sector, beginning our journey more than a decade ago in the United States, where we have signed agreements with major companies such as Amazon, Meta and Google. We provide green energy for facilities including Leaning Juniper IIA and the repowering of Leaning Juniper IIB, Tower Solar, Oregon Trail and True North.

Iberdrola, European leader in PPAs

According to the Pexapark Renewables Market Outlook 2026 report, we are also the European market leader for the third consecutive year in 2025, almost doubling the next company in the ranking. This success is possible thanks to the multiple partnerships we have established across the countries where we operate.

For example, we have signed power purchase agreements to maximise our offshore wind capacity in Germany, where we operate several wind farms:

Wikinger, an operational wind farm with a capacity of 350 MW.

Baltic Eagle, 476 MW already in operation, supplying companies such as Amazon, Dillinger, Salzgitter Group, Holcim and Telefónica.

Windanker, currently under development with 300 MW, expected to provide clean energy to Amazon, Mercedes-Benz, Schwenk Zement and the world’s largest brake materials manufacturer, TMD Friction Services.

Expansion in Italy and consolidation in Spain

We are also growing in Italy, adding new operations to supply energy to companies such as Bayer and Bticino through the Montefiascone solar plant, or Prima Sole Components via our Montalto di Castro facility.

Iberdrola has also signed PPAs in Italy with supermarket chains Tosano, PAM Panorama and Selex, as well as with the steel company Acciaierie Venete S.p.A.

Spain is one of the countries with the highest number of signed PPAs, where we have accumulated nearly 50 contracts over our history. Companies including Amazon, Alcampo (Auchan), BP, Danone, Air Liquide, Euskaltel, Renault, Grupo Volkswagen, Mercadona, Renfe and Burger King Spain, among others, already have a supply of renewable energy thanks to our facilities.

Check the main PPAs signed in the countries where we are present

What is wind energy?

Wind energy uses wind turbines to transform the power of the wind.

Energy Contracts for Difference (CFDs)

What are energy Contracts for Difference?

Do you know how offshore wind farms work?

Offshore wind energy is is obtained by harnessing the power of the wind offshore.

What is solar energy?

Solar energy is an inexhaustible source of renewable energy.

Advantages of a PPA for consumers

Clean energy

Supply of renewable energy, helping buyers meet their sustainability goals and reduce carbon emissions.

Stable price

These agreements allow companies to enjoy stable prices and easily forecast long-term electricity costs.

Potential for additionality

Signing a PPA can make it possible to invest in new renewable assets, reducing energy generation from polluting sources.

Brand image

Such agreements offer the consumer the opportunity to personalise the renewable facility providing their energy with their own branding.

Competitive pricing

PPAs provide energy at a competitive price.

Tailored solution

Each product is adapted to the customer’s needs, something that isn’t possible with standard energy supply contracts.