Middle East conflict lifting PPA valuations, says Pexapark

<p class="p1"><span class="s1">Swiss analytics firm Pexapark says the latest developments in the Middle East are having a visible effect on long-term power purchase agreement (PPA) valuation in Europe, as the market begins to reprice the coming years.</span></p><p><span style="font-weight: 400;">Strikes on liquefied natural gas (LNG) infrastructure in the Middle East are having implications on long-term PPAs and the economics of battery energy storage systems (BESS), </span><span style="font-weight: 400;">according to analysis from Swiss renewables research firm </span><a href="https://www.pv-magazine.com/tag/pexapark/" rel="noopener" target="_blank"><span style="font-weight: 400;">Pexapark</span></a><span style="font-weight: 400;">.</span></p>
<p><span style="font-weight: 400;">In Pexapark’s latest blog update, Nicolas Briet, lead analyst &#8211; renewable energy and BESS, said that reported strikes impacting Qatar’s Ras Laffan industrial complex, the country’s main site for LNG production, introduce a “more structural supply-side risk” to conflict in the Middle East and a tightening of medium-term fundamentals in Europe.</span></p>
<p><span style="font-weight: 400;">Briet added that these developments are starting to have a more visible effect on long-term PPA valuations.</span></p>
<p><span style="font-weight: 400;">He explained that while the impact remains relatively contained in markets such as Germany, where PPA valuations are anchored to power prices over a long period, the situation is different in markets where forward liquidity is limited to only two or three years, such as the United Kingdom.</span></p>
<p><span style="font-weight: 400;">“In these cases, long-term PPA valuations rely heavily on extrapolating short- and mid-term price signals. As a result, any change in medium-term fundamentals feeds through much more directly and fully into long-term valuations, leading to larger repricing,” Briet wrote. “This is already visible, with the PPA Fair Value of a 10-year solar Pay-as-produced (PAP) PPA in the UK increasing by around 19% since the start of the conflict.”</span></p>
<figure class="wp-caption aligncenter" id="attachment_337708" style="width: 600px;"><img alt="" class="size-medium wp-image-337708" height="526" src="https://www.pv-magazine.com/wp-content/uploads/2026/03/Screenshot-2026-03-31-at-15.03.10-600x526.png" tabindex="0" width="600" /><figcaption class="wp-caption-text">Solar PPA tracking in Germany and the UK <p><i>Image: Pexapark</i></p>
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<p><span style="font-weight: 400;">Briet also said that despite improving PPA economics, transaction activity is unlikely to accelerate in the near term, with buyers remaining cautious over securing prices during a geopolitically-driven spike. </span><span style="font-weight: 400;">“At the same time, higher global energy prices feed into the expected renewable cost base,&#8221; Briet wrote &#8220;Equipment, transport and construction costs are exposed to energy inputs, creating upward pressure on expected capital expenditures.&#8221;</span></p>
<p><span style="font-weight: 400;">Briet’s update added that battery storage is the most direct beneficiary of evolving market conditions, with higher gas prices increasing both absolute price levels and intraday volatility, leading to widening spreads.</span></p>
<p><span style="font-weight: 400;">Pexapark’s most recent analysis of the European PPA market found February 2026 had the highest monthly volume of new deals since February 2024, </span><a href="https://www.pv-magazine.com/2026/03/17/pexapark-registers-30-european-ppas-for-2-2-gw-in-february/"><span style="font-weight: 400;">reaching 30</span></a><span style="font-weight: 400;">, including the longest PPA observed in the European market to date.</span></p>