The projects that we develop with our customers have contract terms of five years or more.
Help us shape the transformation of the energy system and reap the benefits: Power Purchase Agreements (also: Corporate or Renewable PPAs) are long-term supply contracts between companies and energy producers. During the contract term, customers are supplied with clean electricity directly from innogy at an agreed price.
Demand is growing: in 2016 alone, the total capacity of supply through Corporate PPAs was over 4.3 GW worldwide. This is more than twelve times as much as 2008. Admittedly, the majority of these contracts were made within the USA. However, PPAs are also becoming increasingly popular in Europe: in 2016, the total capacity of new supply contracts was over one GW, almost three times the amount of the previous year.1, 2
PPA for every need
The long tenor of the contract and its fixed price nature, provides companies greater independence from price volatility.
The expansion of renewable energy is a fundamental principle. We construct facilities such as wind farms or solar fields exclusively for our customers.
The projects are tailored to the company’s needs and can also be adapted to combine with existing solutions.
The advantages of PPA
Added value through Power Purchase Agreements is created on several levels:
Greater scope for economic decisions
A clean record for the climate and the corporate image
A win-win situation with wide-ranging benefits
Different types of Corporate PPA
PPAs are not all the same. We consider the needs of our customers and design an appropriate proposal. PPAs can be divided into the following types:
The contract term is for five years or longer. Clean energy is produced with a plant built specifically for this purpose. The result is a win-win situation: the corporate customer gains planning security, lowers CO2 emissions and profits from a tangible investment in renewable energies. The projects that we carry out for our customers cover all types of generating technologies: wind power, photovoltaic power, hydroelectric power or geothermal power. The energy producer in turn secures a long-term, reliable income source as well as flexibility for further investments. There are two different types of Standard Power Purchase Agreements:
The electricity customer obtains clean electricity directly from the producer, who generates the electricity exclusively for this purpose. In this case, the producer not only invests in new facilities, but also covers the entire supply chain. In other words, the energy producer acts as a full service provider who also takes on the role of supplier.
The electricity producer generates clean electricity for an agreed price and feeds this into the grid. In this case, an independent supplier manages the supply of electricity and the associated responsibilities, such as the creation of load forecasts or the provision of balancing energy.
Virtual PPAs (also called Synthetic or Financial PPAs) are financial products that do not involve the physical supply of electricity. These PPAs can be implemented in several ways, for example:
Price Guaranteed Agreements are traditional CfDs: a basic price is agreed on for a fixed term. The electricity is purchased as usual on the market. If the market price exceeds the contractually agreed price, the electricity provider compensates the customer for the difference. On the other hand, if the electricity price falls below the contractual limit, the customer is responsible for making up the balance.
Certificate Purchase Agreement
With this variation, only the Renewable Energy Certificates (RECs) like Guarantees of Origin (GoO) are purchased long-term for a predetermined price. The agreement is not linked to the electricity price. This allows the customer to maintain flexibility in electricity procurement.
1 FS-UNEP Collaborating Centre; Global Trends in Renewable Energy Investment 2017
2 Bloomberg New Energy Finance