PPAs as a strategic component of industrial electricity pricing – ensuring long-term competitiveness

With the publication of the funding guidelines for industrial electricity prices, the regulatory framework is now in place. But the key question is: how can companies ensure their competitiveness beyond the scope of the funding scheme? The answer lies in the design of the funding scheme – and thus also leads to Power Purchase Agreements (PPAs).

June 2026

What was that about the industrial electricity price again?

We already provided information about the expected subsidy last year.[1] Here is a summary of the key information:

  • Subsidies cover up to 50 per cent of the wholesale electricity price (reference price), up to a target price of 50 euros/MWh or 5 cents/kWh.
  • The reference price is the average EEX German Power Base Year Future for the year preceding the billing year in question
  • 50 per cent of electricity consumption is eligible for aid in the years 2026–2028
  • Indirect electricity consumption by chemical parks may also be eligible for relief
  • Target companies include traditional energy-intensive sectors
  • Applications will be submitted retrospectively for the first time from the start of 2027 for the year 2026
  • Conditions: 50 per cent of the aid must be reinvested in decarbonisation measures within 48 months. Investments in making consumption more flexible are additionally supported.
  • Example: With a reference price of approx. 8.75 cents/kWh for the billing year 2026, this results in (taking into account the price floor of 5 cents/kWh) a reduction of approx. 3.75 cents/kWh for 50 per cent of electricity consumption. If the flexibility bonus is received, the reduction amounts to 4.1 cents/kWh.[2]
  • According to the latest information from Federal Minister for Economic Affairs Katherina Reiche, combining this with the electricity price compensation scheme is also possible for 2026, subject to the budget.[3]

 

Which companies are eligible?

Eligibility applies to 91 (sub-)sectors comprising companies with production facilities (‘consumption points’) that are classified under Annex I, Sub-list 1 of the Guidelines on State Aid for Climate, Environmental Protection and Energy (the so-called KUEBLL list; pp. 84–86).[4] These include:

  • Parts of the manufacture of rubber and plastic products,
  • Parts of the manufacture of chemical products (e.g. industrial gases),
  • Parts of the manufacture of glass and ceramics,
  • Sectors of metal production, such as the manufacture of forged and stamped parts, as well as surface finishing and heat treatment,
  • Sectors of the food industry,
  • Cement production,
  • Semiconductor manufacturing,
  • Sectors of paper production,
  • Sectors of mechanical engineering,
  • Sectors of the extraction of stone and earth.

Other sectors may be included where appropriate.

How PPAs go from being a mandatory requirement to a competitive advantage

The funding guidelines explicitly list new PPAs involving renewable energy installations as an eligible decarbonisation measure. For many companies, this is not only the simplest but also the most economically viable way to meet the conditions for state aid.

After all, not every company can:

  • set up its own investment projects at short notice,
  • adapt ongoing measures in time,
  • or have projects that have already been completed counted towards the target again.

Without suitable and verifiable countermeasures, there is a risk of aid being reclaimed or reduced.

 

Why PPAs offer more than just decarbonisation today

For energy-intensive businesses with high base-load requirements, PPAs offer far more than just a decarbonisation benefit:[5]

  • Long-term price stability and protection against market price volatility
  • Long-term predictability of electricity procurement and protection against market price volatility
  • A basis for planning investments and products
  • Compliance with the state aid requirements under the Industrial Electricity Price
  • Meeting future requirements for industry

When professionally structured, PPAs can be finalised within a few months. The start of supply is coordinated according to the customer’s requirements and the project schedule for the plant. As a result, PPAs have a lasting impact beyond the industrial electricity price. They are a key instrument of modern electricity procurement, particularly for sectors with long-term cost structures.

Important: Newly concluded PPAs that serve to finance new or modernised renewable energy plants are considered eligible for aid. Further details can be found not only in the funding guidelines but also on a comprehensive page on the BAFA website.[6]

 

Vattenfall: PPAs that combine support schemes with security of supply

Vattenfall has an extensive portfolio of planned and under-construction renewable energy plants in Germany – ranging from solar parks to offshore wind projects. PPAs are a key financing instrument in this context and meet the requirements of the support scheme guidelines for the industrial electricity price.

For customers, this means:

  • implementation in line with state aid rules
  • competitive electricity prices in the long term
  • a reliable partnership with an experienced generator

Use the industrial electricity price as a starting point – and secure long-term renewable energy at predictable prices with a PPA.

 

Do you have any questions about PPAs and industrial electricity prices? Please feel free to get in touch!

<a class="arrow">renewables@vattenfall.de</a>

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[1] https://energysales.vattenfall.de/publikationen/artikel/der-industriestrompreis-kommt-grundsaetze-des-entwurfs-und-moeglichkeiten-fuer-vattenfall-kunden

[2] https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Downloads/P-R/pressepapier-zum-industriestrompreis.pdf?__blob=publicationFile&v=6F_de

[3] Stand 10.06.2026, s. z.B. https://www.handelsblatt.com/politik/deutschland/energie-reiche-verkuendet-freigabe-fuer-weitere-entlastung-beim-strompreis/100230638.html

[4] https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Downloads/P-R/pressepapier-zum-industriestrompreis.pdf?__blob=publicationFile&v=6

[5] See also our article on PPAs for data centres: https://energysales.vattenfall.de/publikationen/artikel/rechenzentren-und-ppas-strategische-strombeschaffung-mit-substanz

[6] https://www.bafa.de/DE/Energie/Indurstriestrompreis/industriestrompreis_node.html