What is a PPA?
Many words are used to refer to PPA contracts such as Green Power Purchase Agreements, Corporate PPAs or Renewable PPAs. Simply put, these are long term supply contracts with a fixed price guaranteeing the delivery of renewable power from generator to a business.
Advantages of a PPA with European Energy
AdditionalityPurchasing green power from European Energy guarantees that a new renewable generation facility will be built, and that plant will supply your power. Securing a PPA is the final piece of the jigsaw that allows our projects to be built.
PriceEuropean Energy’s PPAs can supply power for the long term at or below the current wholesale market price.
Cost CertaintyPrices for traditional energy sources are notoriously subject to market volatility. Renewable power purchase agreements protects our customers from that variability by fixing costs for 10-20 years.
Further benefits of European Energy’s PPAs are enhancing a business’ green profile, marketability, improved CSR, better ESG scores and a green image.
Types of PPA
Power and GoOs delivered through the public grid to the customer.
A financial or synthetic product that gives price certainty and includes GoOs, but no physical flow.
Renewable energy produced near or on-site at the customer’s
With a Physical PPA, power is delivered through the electricity network to the buyer (Direct PPA). Power can also be supplied to the buyers regular supplier and the supplier nets off the PPA volume against the buyer’s consumption (Sleeved PPA), allowing the buyer to continue the relationship with their current supplier.
A virtual PPA is financial Contract for Difference (CFD). The buyer agrees to pay the difference between the contract price and the spot price for the volume agreed in the PPA. The buyer continues to their relationship with their current supplier, but buys at the spot price. Thus both spot prices net out and the buyer is left with physical power at a fixed price.
Direct Wire PPA
For businesses with the space European Energy can build on site, or very close and deliver power “behind the meter” directly to the consuming facility. This has the advantage of saving on grid charges.
Both Physical and Virtual PPA Guarantees of Origin are delivered to the buyer proving the origin of their power.
Guarantees of Origin (GoOs)
Our customer pays European Energy through a 10-20 year contract to supply new sources of renewable energy and in addition European Energy pass on government issued energy attribute certificates (EACs) – more commonly known as renewable energy credits (RECs) in North America, GoOs in the EU, and I-RECs or TIGRs in developing international markets. These certificates proved the source of the customers’ energy usage and the certificates can be cancelled to prove the customer has consumed green energy.
If you want to know more contact our experienced PPA team to discuss how European Energy can help your business reduce costs and help make the planet a better place.
Visit our project portfolio to learn more about some of the projects we have already realised.