215. PPAs, FPAs, IPPs, Flex and Capture rates: new paradigms - Feb26

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Feb 9, 2026

Luca Pedretti, co-founder of Pexapark and power market analyst, explains how accounting rules and volatile markets are reshaping renewable value. He covers mark-to-market PPA pricing, the rise of flexibility contracts for batteries, collapsing solar capture rates, and shifting buyer dynamics from corporate PPAs to data centers and optimizers. The conversation spotlights shifting revenue models and the rapid repricing of clean energy.

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INSIGHT

IFRS 13 Makes PPAs Market-Reflective

IFRS 13 forces many PPAs to be marked to market, creating significant earnings volatility for firms.
Luca says mark-to-now improves risk management and reveals real contract value.

INSIGHT

IPPs Becoming Revenue Managers

IPPs are shifting into revenue management, trading and optimisation to capture downstream value.
Luca predicts consolidation as value concentrates in portfolio-level optimisation.

INSIGHT

The Big Repricing In Renewables

Renewable-dominated markets cause a 'big repricing' where value moves from generation to optimisation.
Luca calls this shift structural and central to market evolution.

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Luca Pedretti, Co-Founder, Pexapark, returns to discuss how volatility, market design, and new contract structures are transforming power markets and renewable economics. What begins with PPA pricing quickly evolves into a broader conversation about where value is now created in the clean energy system.

We start with the growing importance of IFRS 13 fair value accounting. In increasingly volatile markets, long-term forecasts are no longer sufficient. Market-implied PPA prices are moving faster than fundamentals and are becoming a key signal for future capture rates and risk, forcing investors to reassess how renewable assets are valued.

The discussion then turns to Flexibility Purchase Agreements (FPAs), including tolls and floors for batteries. FPAs reflect a fundamental shift from generation toward flexibility and optimisation, as renewable-heavy systems face cannibalisation, negative prices, and widening price spreads.

With clean sources now accounting for nearly half of EU power generation, these side effects are becoming structural. Solar capture rates have dropped sharply in markets such as Germany, negative prices now occur in thousands of hours across Europe, and curtailment and balancing costs are rising. Batteries have become the system’s primary response.

We also explore how the buyer landscape is shifting. Hyperscalers and data centres are increasingly driving private PPAs, utilities are regaining relevance through trading and optimisation, and stand-alone renewable PPAs are showing signs of saturation. Despite this, capital deployment across clean energy continues to grow, signalling a reallocation of value rather than a slowdown.

The conversation concludes with a look ahead. Many renewable assets financed under merchant assumptions are now misaligned with today’s pricing reality. Battery tolls and floors are scaling quickly, consolidation among IPPs is accelerating, and capture rates remain unstable. The open question remains whether any buyers are willing to pay a green premium for co-located and hybrid projects in a market where flexibility has become central to value creation.

Link to Pexapark reports
IPPs:
https://go.pexapark.com/next-gen-ipp-playbook

Renewables Market Outlook 2026 - The Big Repricing: How volatility and BESS reshape clean energy markets (PPAs and FPAs):

https://pexapark.com/pexapark-renewables-market-outlook-2026/