A market in flux

Standard or Virtual: Power Purchase Agreements can be flexibly designed

Wind turbines under construction: The market for PPA has been growing in recent years. innogy offers the opportunity to participate.

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

Customers have a choice between a direct electricity supply (Standard PPA) and a purely financial product (Synthetic PPA or Virtual PPA).

The following features comprise the characteristics of Power Purchase Agreements:

The advantages of PPA

Added value through Power Purchase Agreements is created on several levels:

pictogram of a magnifier: innogy gives companies the opportunity to focus on core business.

Greater scope for economic decisions

Corporate PPAs can help to ensure stability regardless of price developments on the energy market. As a result, companies have greater security for planning, since the risk of the project lies with the energy producer.

Pictogram of a wind turbine: Corporate PPAs promote climate goals and corporate image

A clean record for the climate and the corporate image

Many organisations have set themselves ambitious climate goals. Corporate PPAs have lower carbon emissions and thus contribute to the transformation of the energy industry. The investment pays off in multiple ways: the governments of several countries now subsidise climate protection efforts with public finances. As an added benefit, the company enhances its image as a sustainable pioneer.

Pictogram "Table with three people": Power Purchase Agreements benefit everyone involved

A win-win situation with wide-ranging benefits

The producers of renewable energy also benefit: the risk stays low, as revenue can be guaranteed. This lowers capital costs and increases the creditworthiness of the projects. In addition, new opportunities are opened up through entry into new markets. Corporate PPAs also bring benefits for society as a whole: they advance the transformation of the energy system.

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: 

Standard PPA

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:

Virtual PPA

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:

1 FS-UNEP Collaborating Centre; Global Trends in Renewable Energy Investment 2017

2 Bloomberg New Energy Finance

Contact

Contact Corporate PPA: Willemsen

David Willemsen

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Learn more about PPA

Calculating the electricity price of the future

Clean energy at an agreed price

A sustainable partnership for the long term

Sustainability

How PPAs help to achieve climate goals