The SR Inc Net Zero Consortium for Buyers (NZCB) European Virtual Power Purchase Agreement (VPPA) Opportunity Index informs corporate renewable energy buyers interested in procuring clean energy in Europe. It provides an overview of VPPA trends, key regulatory changes, battery energy storage system (BESS) trends, and solar and wind forward pricing by active country.
Q2 2026 was riddled with geopolitical strain on the European energy markets. The ongoing conflict in Iran, resulting in the closure of the Strait of Hormuz, where the transportation of 20% of the world’s liquid natural gas occurs, has resulted in a shortage of gas across European markets. On June 30th, the European gas storage levels were at 49%, 14% below the 10-year average for this date of 63%. This is significant not only because it signals a summer gas shortage, but also because the European Commission has required countries to have gas supplies stocked up to 90% by November 1st, since 2023 (no standard existed before the War in Ukraine), in preparation for high gas usage for heating in the winter.
This winter season, however, the European Commission is easing requirements, to allow the 90% of gas storage capacity to be filled, any time from October 1 to December 1 and will allow member states a 10% deviation from the 90% threshold, if there are dire market conditions. Energy analysts are therefore using the 80% threshold this year to measure this requirement.
On top of this, in typical years, storage operators are incentivized to inject gas supplies into their stockpiles in the summertime because of the relatively low summer gas prices compared to winter prices, which provide a window of arbitrage. This year, due in part to the strain in the Middle East causing upward pressure on prices, there is a “backwardation” problem, where the market is not incentivizing the stockpiling of gas in the summer months. Summer spot prices are higher than winter forward contracts, causing an energy market anomaly.
This summer shortage, combined with an expected Super El-Niño weather event, could have Europe battling with a serious gas shortage this winter. Norway’s Equinor anticipates that there are two possible resolutions to this problem: an easing in the gas constraint, or €90/MWh electricity prices this winter (materially higher than the long-term winter average).
Two major revisions to corporate carbon emissions accounting continue to advance in parallel. The GHGP's Scope 2 Guidance revision is in the consultation process, with final publication targeted for late 2027; proposed changes would introduce hourly-matching and deliverability considerations for market-based Scope 2 reporting. SBTi finalized its Corporate Net-Zero Standard (CNZS) V2.0 in June, with adoption required for participants setting targets after February 1, 2028. V2.0 introduces separate and updated Scope 1, 2, and 3 target-setting approaches, Scope 2 deliverability requirements and hourly reporting requirements, and mandatory climate transition plans.
Long-term contracts signed before February 1, 2027 will qualify under SBTi’s legacy clause, allowing companies to apply those EACs in alignment with current Scope 2 guidance and avoiding new deliverability guidelines (e.g. across Europe’s AIB region). After February 1, 2027, companies will either need to procure clean power within the activity pools in which their consumption occurs, or aggregate their demand across “wide area synchronous grids.” A conservative reading of the standard and section C30.3 indicates that procurement and subsequent application of GOs in the EU therefore may be limited within ENTSO-E’s (European Network of Transmission System Operators for Electricity) zones separately:
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Continental Europe Synchronous Area (CESA) |
Nordic Synchronous Area |
Other Stand-Alone Synchronous Grids |
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Albania, Austria, Belgium, Bosnia-Herzegovina, Bulgaria, Czech Republic, Croatia, Denmark (West), France, Germany, Greece, Hungary, Italy, Kosovo, Luxembourg, Montenegro, the Netherlands, Poland, Portugal, North Macedonia, Romania, Serbia, Slovakia, Slovenia, Spain, Switzerland, Turkey, Estonia, Latvia, and Lithuania |
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Because this is significantly more stringent than current practice, many NZCB members are prioritizing signing long-term contracts before the February 2027 SBTi legacy deadline, aligned with this interpretation. However, SR Inc’s read of the CNZS V2.0 Executive Summary insists that further aggregation (e.g., combining continental load with load in the Nordics) for a new long-term contract should be allowed as well. Note that this is an interpretive analysis and advocacy position that SR Inc and engaged Member-Clients will continue to present to SBTi for further confirmation.
Causation is supported by the overwhelming weight of feedback on the GHGP revisions and is the primary reason the hourly- and location-matching requirements appear more likely to be made preferential than mandatory in their final Scope 2 Standard. However, NZCB members executing VPPAs now under current market-based frameworks are generally well-positioned regardless of how the standards resolve. SR Inc is also evaluating 24/7 carbon-free electricity (CFE) feasibility with several Member-Clients, including storage-enabled pathways.
On June 8, 2026, the European Commission approved a €23 billion Italian State aid scheme designed to accelerate renewable electricity generation across the country. The scheme is projected to add 37.15 GW of new renewable electricity capacity, supporting the construction of installations using onshore wind, hydropower, solar power, and biogas, which represents roughly 48% of Italy's current renewable capacity. Support will run through a 20-year contract for difference (CfD) mechanism, with funding allocated mainly through competitive tenders, though projects smaller than 1 MW will be eligible to access the scheme directly. The competitive bidding design gives investors visibility on long-term revenue but also places pressure on project economics, requiring developers to balance capital costs, permitting risk, and grid access. The initiative is intended to help Italy meet its target of sourcing 39.4% of gross final electricity consumption from renewables by 2030, and more broadly aligns with the EU's Clean Industrial Deal and REPowerEU plan, aiming to lower electricity costs while reducing the Union's reliance on foreign energy.
Negative pricing intensified across Europe's largest markets in the first half of 2026, with France, Spain, and Poland each recording more negative-price hours in H1 2026 than during the entirety of 2024 according to LevelTen Energy. The drivers behind this increase vary by market: in Germany and Spain, severe cannibalization and negative pricing stem from concentrated solar oversupply hitting the grid simultaneously during peak generation hours. Inflexible coal generation, imported low prices from neighboring markets, and negative bids from Nordic generators have compounded the pressure elsewhere.
The effect on pricing has been uneven rather than uniformly negative, Q2 marked the first quarter in over a year that average European solar PPA prices rose rather than fell, an increase LevelTen attributed to surging Polish and German wholesale prices tied to constrained global gas supply rather than to any easing of cannibalization risk.
Storage is emerging as the market's structural response to this dynamic: LevelTen's inaugural Hybrid PPA Index shows hybrid deals priced 24% above standalone solar PPAs (though still 15% below wind), reflecting the strike-price premium for storage-integrated configurations. That premium is increasingly justified by materially higher settlement values, with hybrid offers more than doubling year-over-year, concentrated heavily in Germany and Spain, which together accounted for 29% of all hybrid PPA offers on LevelTen.
The NZCB found that solar VPPA offer prices (on a like-for-like basis) had increased from €57.57 in Q1 to €59.40 across active countries in Q2 (3% increase), likely due to higher gas prices. While there were ten countries with active solar offers in Q2, there were only four with active wind offers, and the average wind VPPA price (on a like-for-like basis) decreased from €44.73 in Q4 to €44.00 across active countries in Q1 (2% decrease).
Using both historical and forecasted data in Q2 2026, SR Inc’s analysis shows that average VPPA settlement prices across active hubs was €48.89/MWh through term for solar and €74.94/MWh for wind (ranging from €36.20/MWh for Spanish solar to €87.71 for Italy wind).
As represented in the graphic below, our analysis shows that Greece, Italy, and Spain showed the greatest opportunities for positive or breakeven cashflow for solar VPPAs in Q2 2026, earning an average annual positive cashflow of €212K, €112K, €98K respectively for a 10 MW offtake. However, the average estimated return on a 10 MW solar offtake across the active European countries was a cost of about €80K per 10MW in Q2, which equates to a cost of about €4.02/GO, which is more expensive than buying reputationally riskier unbundled GOs, which cost €1.71 each for a 10-year strip as of July 2026.
The below graphic shows that the greatest modeled opportunities for positive cashflow for wind VPPAs in Q2 2026 were Italy, Bulgaria, and Finland, producing average positive cash flows of €267K, €189K, €70K, respectively, for a modeled 10 MW offtake. The average estimated return on a 10 MW wind offtake across the active European countries was a savings of about €102K per 10MW in Q2, which equates to a gain of about €3.41/GO, which compares favorably against buying reputationally riskier unbundled GOs.
The Net Zero Consortium for Buyers (NZCB) is a buy-side-only procurement consortium operated by SR Inc, designed to give corporate buyers access to utility-scale renewable energy procurement on terms previously available only to large utilities and hyperscale technology companies. NZCB members benefit from aggregated purchasing scale, SR Inc’s reverse auction structure (which consistently produces below-market pricing), and SR Inc’s buy-side-only advisory model, ensuring that every recommendation reflects the interests of corporate buyers.
Through NZCB, companies with 5 MW or more of individual offtake capacity in a given market can participate in transactions that deliver premium pricing, project quality, and contractual protections. SR Inc’s VPPA 2.0 model democratizes access to this procurement pathway for mid-market and large corporate buyers. NZCB’s reverse auction process creates competition among developers bidding for member offtake, resulting in pricing that beats market benchmarks quarter after quarter.
For information on joining the NZCB, please contact NZCB@sustainround.com.