LevelTen Energy Releases New Report On State of Renewable Energy M&A

Europe In Transition: Rapid M&A Growth Gives Way To More Selective & Strategic Dealmaking

LevelTen Energy, the leading provider of transaction infrastructure for the energy transition, today releases the findings of its latest report, Renewable M&A State of the Market Report. Focusing on H2 of 2024, the report provides a snapshot of the European renewable M&A market, supported by exclusive LevelTen data and analytics to provide market insights only available from LevelTen Energy M&A Solutions.

EU M&A market dynamics: From boom to buyers’ market

With ambitious goals to become the world’s first major economic bloc to achieve climate-neutrality by 2050, EU-wide and country-level support mechanisms drove a phenomenal deployment rate for renewable energy across many European nations, resulting in unprecedented M&A activity during 2021 and 2022.

Yet by 2023, it was clear a slowdown was taking place, the market shifted from a seller’s market to a buyer’s market. As found by LevelTen Energy in this report, this trend continued pointing to a distinct change in buyers’ philosophy, as they became far more selective with the projects they acquired. The report finds:

M&A market inundated with projects; buyers avoid competitive processes: Macroeconomic conditions have compelled many companies to bring assets to market causing the market to be saturated with projects, across the EU. Aware of their advantage, buyers are steering clear of competitive processes - except for standout “rock-star” projects - favouring bilateral deals instead.

• Glut of projects sees developers give more favourable deal terms: Small- to medium-sized developers, unable to push their pipelines forward, are looking for development capital by inviting potential asset buyers to acquire their projects earlier on in the development process. This has also led to an increased willingness from sellers to share development risk and give away part of their upside.
• Yet buyer and seller expectations clash on transaction details, slowing deal flow: In such an environment, deals are taking longer to close, as buyers aren’t acting with the urgency they may have had in previous years when competition was greater. Deals are also dragging out because of the misalignment of buyer and seller expectations on transaction terms. Buyers are more often implementing stronger security mechanisms that are difficult for sellers to accept.
• Storage assets attract massive interest across Europe: More than 90% of the European volume auctioned through the LevelTen Energy Platform during 2024 was for BESS (Battery Energy Storage System) projects. This is despite many central governments still working on defining the rules and mechanisms for remunerating storage. Asset buyers are also now often proposing payment structures to developers that are contingent on projects being awarded public support schemes.
• Development fees plummet: With such an oversupply of projects in the market, ongoing market constraints, and asset buyers becoming more selective, the development fees seen on the LevelTen platform in 2024 declined markedly. For example, development fees for Italian BESS projects dropped by as much as 60% when comparing 2023 prices to those at the end of 2024.

The EU’s Renewable M&A hotspots

The report also highlights that Italy, Germany and Eastern Europe have emerged as the hottest M&A markets in Europe.

Italy’s ‘always just around the corner’ MACSE auction

• Italy’s MACSE auctions aim to support the installation of power storage capacity, which is seen as critical to achieving the country’s renewable energy target of 130 GW by 2030. With the first auctions expected during the second quarter of 2025, the MASCE “paid as bid” structure, paired with fierce competition, is expected to push down the clearing prices, squeezing project returns for assets that successfully bid in.
• This aside, MACSE auctions will provide Italian BESS investors with a low-risk and stable business case built around a 15-year fixed price - which has driven much of Italy’s M&A activity during 2024.

Germany and the intraday business case

• One key factor underpinning the German BESS investment case is the country’s liquid and volatile intraday market. As renewable energy penetration continues to grow, volatility in both the German Day-Ahead and Intraday markets has worsened due to increasing incidences of low and negative prices.
• German lenders' growing appetite and the rapid development of the country’s tolling and offtake contracts are driving interest from experienced BESS investors. The most active in the German M&A landscape are either industrials - with pumped hydro in their portfolios - or international fund-backed players already present in more mature BESS markets like the UK.

Poland, Romania, and the rise of the ‘eastern side’ of the force

• Poland remains at the forefront of Europe’s eastern region with a stable and strong renewable support scheme driven mainly by the annual auctions held there since 2016.
• Meanwhile, Romania was once one of the most active renewable markets in southeastern Europe, thanks to a renewables boom between 2010 and 2014. However, a period of stagnation followed when the government introduced retroactive tariff cuts, damaging project developers’ revenues.
• Yet some regulatory changes, together with CfD (Contract for Difference) auctions in 2024 and 2025 aimed at awarding 5 GW of combined solar and wind capacity, have revitalized the country’s clean energy industry, making Romania the fifth-most attractive emerging market according to the Cimatescope score by BNEF.

“As shown within this report, when it comes to the energy transition in the EU, the only constant is change,” said Carlos Almoldovar, Global Director, Asset Marketplace at LevelTen Energy. “Europe’s M&A landscape remains robust, and players on all sides are adapting to shifting market conditions and needs.”

“This report also marks a key milestone for LevelTen Energy itself, as it is our first report to date to feature European data and insight on the M&A market in the region. The EU is crucial to us and we’re delighted to now be able to provide industry-leading market intelligence and data to help all stakeholders involved in renewable energy M&A activity to confidently execute their business goals.”

To download the full report, please visit here.