IPP Zelestra and utility EDP’s recent PPA deal for a solar-plus-storage project in Spain was the first of its kind in Europe and ‘moves the market forward’, a Zelestra executive told ESN Premium.
The companies signed a solar-plus-storage power purchase agreement (PPA) for a 170MWp solar, 400MWh battery energy storage system (BESS) project in Extremadura, Spain, in July 2025, claimed as the first of its kind. Co-located projects typically have a PPA in place for the solar PV portion, but not one that covers both the solar and BESS.
“As far as we know it was indeed the first in Europe. It is a PPA 2.0,” Zelestra’s chief product officer Stefano Breda told Energy-Storage.news Premium, adding that construction on the project is underway.
“It moves the market forward and responds to the challenges of delivering guaranteed supplies for customers in specific blocks of the day in markets that already have a high penetration of wind and solar.”
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Breda and Italy CEO Eliano Russo were discussing the firm’s recent BESS PPA and toll activity in Spain and Italy for an upcoming Q&A article.
Breda said that, when compared with conventional solar-only PPAs, the Spain deal mitigates price cannibalisation risk and generates a higher grid decarbonisation impact because the energy discharged by the battery will usually be displacing gas generating units.
When asked why we might only be seeing these kinds of deals in Europe now, when solar and BESS have been co-located for years, Breda said it’s a combination of market revenue and BESS pricing dynamics. Battery prices have fallen, as have the ancillary services that BESS project revenues have historically relied on. This has shifted the business model more towards solar load shifting, opening up the business case for deals like these.
It also opens up a revenue stream for BESS that might have its ancillary service market participation limited because of being co-located.
Zelestra’s experience in Chile, where it had already secured combined solar and BESS PPAs before the Spain announcement, helped it get this deal over the line quickly. It meant the company knew the main challenges it would need to overcome, both technical and engineering as well as commercial.
The shifting market dynamics in Spain have also enabled the addition of BESS to solar PV plants at no cost to the solar PV plant owners, the founder of a new firm called Lunas Energy told Energy-Storage.news in an interview in October 2025.
The Spanish grid-scale storage market has progressed rapidly in the past six months, with the government finalising recipients for an €840 million (US$981.61 million) grant package and large-scale project portfolios progressing to construction from Naturgy, Iberdrola and Turbo Energy. The discussion around the benefits of large-scale BESS on the grid has been particularly heightened since the Iberian blackout in April.
Energy-Storage.news publisher Solar Media is hosting the Energy Storage Summit EU 2026 in London, UK, on 24-25 February 2026 at the InterContinental London – The O2. See the official website for more details, including agenda and speaker lists.
