More than 1 GWh of European storage PPAs registered by Pexapark in March
Conflict in the Gulf has brought a structural shift to global energy markets that extends beyond short-term volatility. Attacks on liquified natural gas (LNG) infrastructure has amplified the impact on energy markets, according to Pexapark, following an initial focus on temporary logistical disruptions. War between Israel, the United States and Iran could now pose medium-term supply risks.
It’s a shift that has direct consequences for electricity markets, power purchase agreements (PPAs) and the battery energy storage system (BESS) sector.
From short-term volatility to medium-term risk
The market’s initial reaction was in response to disrupted gas flows through the Strait of Hormuz, which affected spot prices and short-term contracts. However, the reported attacks on the Ras Laffan industrial complex in Qatar – which accounts for between 70% and 75% of the country’s LNG export capacity, and about 15% to 20% of global supply – pose a significantly greater risk.
It is estimated that it could take between three and five years to fully restore the affected liquification capacity. This implies a potential reduction of capacity over the medium term and requires a revision of previous forecasts of a global LNG market with excess supply by the end of the decade. For Europe, this scenario translates into tighter energy market fundamentals.
Impact on the futures curve and prices
This structural shift is already reflected in the natural gas futures curve. The price was initially concentrated in short-term contracts (2026-2027), but it has gradually spread to longer-term contracts, such as the CAL28 and CAL29 contracts, with additional albeit more moderate adjustments in subsequent periods.
Since natural gas is the marginal technology in many European electricity markets – meaning it often sets the wholesale electricity price – this increase in cost is directly passed on. In Germany, gas-fired generation has historically determined the market price between 45% and 55% of the time, which is why electricity futures are sensitive to fluctuations in gas prices. This effect is less pronounced in markets such as Spain, where natural gas has influenced electricity prices only 15% of the hours so far in 2026.
What it means for battery storage PPAs
Persistent upward pressure on prices has direct implications for the valuation of PPAs. An environment with structurally higher prices can enhance the relative competitiveness of renewable PPAs by offering price stability in the face of volatile markets. However, it also introduces greater uncertainty into long-term pricing, especially in contexts where natural gas continues to set the marginal price.
At the same time, new pricing environments enhance the economic appeal of BESS. Increased volatility and the spreads between peak and off-peak hours create more arbitrage opportunities, boosting the revenue potential for these assets.
The evolution of business models will also depend on regulatory factors and grid access, as well as emerging contractual mechanisms such as flexible connection agreements, which are changing the allocation of risks in markets such as Germany.
Pexapark registered storage PPAs for 663.5 MW / 1,327 MWh of European BESS in March. The consultancy in has compiled a list of several energy storage deals signed during the month. These include Matrix Renewables agreement with EDF for a 500 MW/1,000 MWh BES in the United Kingdom that has a two-year term. A two-year deal was also made for a 15 MW/ 30 MWh BESS in the Netherlands by Energy Solutions Group with Espired/Flexcity. In Germany, Münch Energie and Suena have signed two agreements, each with a two-year term: one for 49.5 MW / 99 MWh, and another for 99 MW / 198 MWh.
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