Anyone who looks around the market for green power products and, in particular, power purchase agreements (PPAs) knows that successfully bringing energy producers and end customers together is a story in itself. But where there are good offers, there are usually equally willing buyers. So-called PPA platforms are ideal for bringing buyers and sellers together. Sarah Drevermann, Senior Originator Renewables at ENGIE Global Energy Management Services & Sales, explains for whom the trading platforms are suitable and for whom they are not.
Power purchase agreements (PPAs) have become an integral part of power procurement and decarbonisation. They offer suppliers and end customers alike a calculatory framework for the purchase and sale of energy and are a reliable hedge against fluctuating electricity prices on the volatile energy market. Via PPAs, end customers reliably purchase green electricity from specific renewable energy plants. The contracts are also a good option for the supply side. This is especially true for operators of plants whose support under the EEG feed-in tariff is coming to an end. With contractually regulated power purchase agreements, energy producers again benefit from price certainty - and even in the long term, depending on the PPA.
PPAs enable the path to decarbonisation, but the contractual design of the price structures is not always clear for every company. PPAs are still highly individualised contracts and a range of procurement structures are available to companies.
Platforms for PPAs are essentially digital marketplaces that connect renewable energy project developers and electricity consumers who want to purchase renewable energy:
Platforms are evolving rapidly. The market for platforms is highly competitive, with new players coming to the table or joining forces. Thus, the PPA market is constantly evolving.
In PPA markets where there is an imbalance between supply and demand, platforms reach their limits. Especially where fewer new projects are being built and demand on the industrial side is high, the incentive and speed of response on the platforms is limited.
The tenders on the platforms are highly standardised with the intention of simplifying processes and making bids comparable. However, this often simplifies tenders and the individual characteristics of the different markets in Europe, between the UK, Germany or Spain cannot be processed in the process. Standardisation is necessary, but one should take into account that complex structures cannot be completely inserted into a matrix.
For companies, platforms can be an enabler to accelerate green energy procurement. They have the potential to expand and diversify the pool of corporate buyers looking for green energy solutions.
Thus, in a first step, platforms offer a promising snapshot into the respective PPA market. As a second step, and in order to avoid blind spots, industrial companies and SMEs need to remain flexible in their terms and conditions, as each market and project status is unique. A close bilateral relationship between buyer and seller is crucial for handling large contracts that span several years.
For us, it is very important that we put together the PPA for each of our clients that fits their needs exactly. With regard to the length of the term, the delivery volume and the delivery model, but also with regard to special requests, for example the integration of regional plants or the special use of green electricity. This results in very different constructs, as with Google, Currenta or now currently Charter Hall, one of the leading real estate groups in Australia.
We were present at the Wind Energy Days 2023, informing, educating and providing important impetus. Read more here!
Italy's largest agri-solar park with a new type of purchase agreement: Read more in ENGIE Germany's Zero Carbon magazine!
Intersolar Europe 2023 offered numerous expert contributions and knowledge in the PV sector. ENGIE was also represented, of course. What there was to see there is here!
A tried and tested procurement strategy is once again under discussion. Find out here why full supply is worthwhile again for municipal utilities.
Onsite PPAs with photovoltaics are the ticket to rapid decarbonization and energy independence for many companies. More about this here!
Exciting presentations and innovative solutions for wind power: read more about our contributions to the Wind Energy Days 2022 here.
Repowering is a sensible solution for wind turbine operators. Learn more about it in this article. Continue here!
Power Purchase Agreements open up a wide range of possibilities for industrial companies on their way to climate-neutral power procurement.
With the end of the EEG support, the wind sector needs to be reconsidered. Power Purchase Agreements (PPAs) or repowering provide reasonable alternatives for the continued operation of the plants.