Danish and Swedish solar PPAs to take off

Anne Petersen


LONDON (ICIS)–There were two Swedish corporate power purchase agreements (PPAs) signed for off-take from small-scale solar projects in October, of just three signed in Europe overall, with experts indicating interest in Nordic PPAs is rising.

Denmark and Sweden may seem less obvious locations for the technology, but rising wholesale prices and short delivery times are making new projects increasingly attractive.

Mikkel Kring, a partner at PPA advisory OurNewEnergy, said: “Mid-sized corporates see solar as more attractive than wind.

“They are keen to go green quick and the shorter development time on solar is attractive in that context. The high Nordic power prices help and we are currently seeing solar PPA pricing around the €40/MWh level.”

Sergiu Maznic, senior consultant at AFRY Management Consulting, added: “Higher energy prices make a difference as PPAs tend to move with the forward prices.

“With load factors close to Northern Germany higher PPA prices, and even some grid revenues, you can get a decent return on a solar PV project in Denmark and the south of Sweden.”

However, the high power prices could also slow the growing market.

“Off-takers are asking themselves if this is the right time for entering a PPA given the current energy price squeeze and an increasingly sellers’ market,” Maznic added


In the Nordics solar projects tend to get permits more easily than wind installations, as well as being faster to complete.

The capacity of photovoltaic (PV) plants also make them attractive for the corporate PPA market in the region.

”There has been a change from wind towards solar projects, especially in Denmark and the southern SE3/SE4 bidding zones in Sweden.

“In Denmark, the change is driven by the limited availability on new-build wind, and in Sweden the driver is the increasingly competitive LCOE [levelised cost of energy] of solar, and the fact that a single mid-sized corporate can source 100% of the output from a solar farm,” Kring said.

With Nordic solar projects typically around 30-150MW and requiring a much smaller investment “solar is the sweet spot,” according to Maznic.

“Most corporate names have electricity demand that is simply too small for a large wind project PPA of several hundred GWh,” Maznic added.


Axfood, a Swedish food retailer, signed a deal for 40MW of installed capacity last month, while trading business Axel Johnson secured a PPA via a 30MW project.

The two solar farms will more than double Swedish solar capacity linked to PPAs and will be built in the SE3 and SE4 bidding zones.

Solar PPAs are well-established in Denmark with 288MW of new projects launched in 2019, although none were announced in 2020, and 176MW of deals announced so far this year, according to ICIS data.

In Sweden only 12MW of solar PPAs were signed before 2021, before 88MW of deals so far this year. According to Kring, this could be about to change.

“Sweden is about a year behind Denmark with regards to solar PPAs and market development in general, and consequently we expect a significant boost in the Swedish solar development and PPA market,” Kring says.


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