According to Montel, energy consumers in Europe are seeking to hedge against price volatility and supply shocks amid rising geopolitical tensions. The report said the hedging value is highest in short-term PPAs.
May 22, 2026
Share of PPAs concluded in Europe by contract duration
The Iran-related conflict is driving price volatility and supply concerns in European energy markets and, according to Montel analysis, increasing interest in short-term power purchase agreements (PPAs). In periods of uncertainty, the hedging value of such contracts is considered highest, as price signals respond more quickly to geopolitical developments.
Montel’s PPA Deal Tracker, which categorises annually concluded PPAs by contract duration, shows that the share of agreements with terms of one to four years rose from around 6.8% in 2025 to about 14.6% year-to-date in 2026. The share of five- to nine-year contracts also increased, from 12.3% to 20.8%.
