For much of the last decade, Corporate Power Purchase Agreements (CPPAs) were used mainly by a small group of highly sophisticated buyers. They were complex, long-term contracts designed primarily to finance new renewable projects rather than shape mainstream energy procurement strategies.
Q4 2025 marked a clear turning point in the CPPA market, with deal activity accelerating. In January 2026, the Government published its first formal Call for Evidence (CfE) on CPPAs. Buyer behaviour has shifted decisively away from new-build projects towards operational renewable assets.
In 2025, Drax Energy Solutions (DES) supported two of the largest CPPA transactions in the UK:
- A five-year agreement with Thames Water, covering 132GWh of electricity each year, enough to power approximately 15 per cent of its essential operations.
- An eight-year agreement with Global Switch, to supply 70GWh annually, accounting for more than 30 per cent of the data-centre operator’s electricity needs.
Signals point towards a growing and maturing market. CPPAs are now key commercial instruments for large energy users dealing with volatility, decarbonisation efforts and long-term cost concerns.
From niche to necessary
By publishing its CfE, the Government has shown that it now sees CPPAs as strategically important to the UK’s clean power transition and industrial competitiveness. The consultation focuses on understanding barriers to adoption, including credit requirements, contract complexity and deal, and how to improve accessibility and scalability.
For large energy users, the CfE matters because it strengthens confidence in CPPAs as long-term procurement routes. It increases the likelihood of reforms that standardise contracts, improve risk allocation and widen market participation.
At the same time, corporate demand surged in 2025 for structural reasons. Even as prices stabilise from crisis peaks, wholesale power prices remain exposed to global market volatility. Businesses are increasingly uncomfortable with rolling short-term contracts that expose them to unpredictable cost swings. CPPAs offer something fundamentally different: there is no other product in today’s energy market that allows a consumer to fix their electricity price over a period of five years or more.
Why buyers are pivoting towards operational assets
One of the most important market changes in late 2025 was the shift away from new-build projects towards operational renewable assets. Historically, CPPAs were closely tied to financing new generation. Buyers accepted construction and development risk in exchange for long-term price certainty and ‘additionality’ – the development of new renewable energy capacity that otherwise wouldn’t exist. Today, many are making a different trade-off.
New-build projects increasingly benchmark revenues against Contracts for Difference (CfDs), pushing CPPA pricing beyond levels many corporates can justify commercially. Operational assets, by contrast, typically offer pricing closer to wholesale levels, with fewer risk premiums embedded. In an environment where boards and chief financial officers are focused on resilience and capital discipline, that difference matters.
Risk appetite has also changed. New-build CPPAs involve multi-year lead times and execution risk before any power flows. Operational CPPAs deliver immediate value, faster emissions impact and simpler implementation. For organisations under pressure to show near-term progress against climate targets – and manage energy risk today – that immediacy is compelling.
What this means for large energy users
Today’s CPPA market is different to what many businesses initially encountered. Commercial interests are increasingly driving CPPA uptake, enabling greater flexibility and accessibility. Pricing discipline now coexists with sustainability goals. Risk allocation is becoming more stringent. Contract structures are evolving to better align with corporate load profiles, budgeting cycles and balance sheet constraints.
Crucially, organisations aren’t viewing CPPAs primarily as project finance tools. Instead, CPPAs are becoming energy strategy instruments – mechanisms for managing long-term price exposure, stabilising operating costs, supporting Net Zero commitments and improving energy resilience.
The Government’s engagement reinforces this direction of travel. As frameworks evolve, contracts standardise and market infrastructure matures, CPPAs are likely to become easier to transact and integrate into core procurement strategies, broadening adoption beyond today’s early movers.
For large energy users, the question in 2026 is no longer whether CPPAs belong in your procurement strategy. It’s about deploying them in a way that aligns with your risk appetite, decarbonisation pathway, and commercial objectives.