Green power purchase agreements can be flexibly adapted

Physical or virtual: green PPAs can be tailored to the needs of different businesses

Long-term and at a fixed price

With green power purchase agreements, you can flexibly adapt the future electricity supply of your business according to its needs. Green PPAs (also corporate or renewable PPAs) are long-term supply contracts between businesses and generating companies. For the duration of the contract, we supply our customers with green electricity at a fixed price and in turn we invest in renewables.

Benefits of corporate PPAs

1. More room for economic decisions

Corporate PPAs ensure stability, regardless of how prices develop on the energy market. Accordingly, companies can plan more securely, especially since the energy-generating company carries the risks associated with the project.

2. A clean balance sheet helps protect the climate and is good for the image

Many businesses have set ambitious climate targets for themselves. Corporate PPAs lead to reduced CO2 emissions and therefore help drive the energy transition forward – within the company and beyond. The investment thus pays off in different ways: the governments of some countries subsidise climate protection measures. In addition, the company can hone its profile as a pioneer of sustainability.

3. A win-win situation with extensive benefits

Energy companies that generate energy from renewable sources also benefit from the agreements; the risks remain low, since the customer guarantees to purchase the supply. This reduces capital costs and increases creditworthiness of the projects. In addition, new perspectives open up by entering new markets. Corporate PPAs also benefit society as a whole; they make our world greener, one PPA at a time.

Our PPAs in detail

Several turbines inside a hydroelectric power plant generating energy. innogy supplies electricity from renewable sources at a fixed price – the green PPAs can be tailored according to the needs of the individual businesses.

Not all PPAs are the same. You can choose between an actual physical supply with electricity and purely financial products. Together with you, we will work out which version suits your needs best.

Both physical and virtual PPAs are available:

Physical PPAs

The contract term is five years plus. A plant that is built especially for this purpose produces green energy at a fixed price. We use all types of renewable energy sources for these projects, including wind power, photovoltaics, hydropower or geothermal energy. The result is a win-win situation. Businesses can plan more securely and reduce their carbon footprint. In turn, we secure a steady stream of income with green PPAs and thus leave scope for further investments. Physical PPAs can be implemented in different ways:

  • Direct PPAs: businesses are supplied with green electricity directly by the generating company that produces this energy exclusively for this purpose. Here, the energy utility that generated the energy does not only invest in new assets but covers the entire supply chain. In this way, the energy generating company becomes a full service provider and also supplies the electricity.
  • Sleeved PPAs: the electricity generating company produces clean energy at a fixed price and feeds it into the grid. In this constellation, a different company acts as supplier and takes on tasks like producing load forecasts or providing balancing power.

Virtual PPAs

Virtual or synthetic PPAs are financial products that do not include a physical supply of electricity. These PPAs can be implemented in different ways, for example as:

  • Price-guaranteed agreements: these are classic CfDs (Contracts for Diference). A base price for a certain period is agreed. The electricity is bought in via the market as usual. Should the market price be higher than the price agreed in the contract, the electricity supplier will cover the difference. However, should the electricity price fall below the limit set in the contract, the customer will pay the difference. 
  • Certificate purchase agreements: with this type of purchase agreement, only the guarantees of origin are sold at a pre-set price over a long contract term. The prices are not linked to the electricity price. In this way, the customers remain flexible in terms of buying in their electricity. 

Opportunities and perspectives

A man is looking across a laptop through a rolled-up paper into the picture. The foreground shows model-sized wind turbines. PPAs open up a number of attractive opportunities for companies to future-proof their business.

Green PPAs can do more for a company than just improve its image. They open up perspectives for the companies to achieve their strategic goals.

Selling excess power

Green PPAs help make companies’ electricity supply sustainable. Google is leading the way and despite its enormous energy demand the company now covers 100 per cent of its electricity supply with energy from renewable sources. At the same time, businesses will reduce their future electricity consumption as a result of technological advances. The company could make extra money from selling on green electricity certificates at a profit if the electricity supply is higher than the demand.

Achieve climate goals

More and more companies set climate targets for themselves. Green PPAs are important stepping stones on the way to reaching those targets. When entering into long-term contracts, the companies receive green electricity certificates, ensuring they are supplied with sustainable electricity. In this way they also reduce their carbon footprint.

The infographic explains the PPA principle. PPAs are long-term supply contracts in which innogy guarantees to supply energy from renewable sources at a fixed price. Green PPA may be set up as either virtual or physical PPA.

Further measures in a company's CSR strategy include CO2 certificates, for example. These compensate for greenhouse emissions that may occur in addition to the supply with electricity. This includes areas such as transport, production or heat generation. By purchasing CO2 certificates, the companies invest in climate protection projects.

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