PPAs: Renewable Energy Projects
Power Purchase Agreements (PPAs) enable you to be involved directly in the development or operation of a renewable energy project. PPAs can therefore be an interesting pillar to your green energy procurement strategy. Our experts support you in finding the best suited PPA model to meet your green energy targets in the most cost-effective way.
PPA Consulting - the services of First Climate
Strategy consulting and workshops
Development, implementation and supervision of tender processes (RFQ/RFP)
International market and project
Consultation in contract drafting and negotiations
What are Power Purchase Agreements?
Power Purchase Agreements are usually long-term offtake contracts (usually 5-15 years) between a company and the developer of a renewable energy facilities (solar/wind/hydro). Companies who source renewable energy through PPAs profit from a variety of benefits; they help to secure a renewable electricity supply at a predetermined tariff, they minimise financial risks associated with volatile prices and simultaneously avoid the need for upfront investment or operation and maintenance charges.
Depending on the underlying structure, the market usually distinguishes between two types of power purchase agreements.
There are different types of physical PPAs, from on-site to off-site. In both cases, parties agree on a fixed amount of electricity to be sold and delivered through the PPA. An on-site PPA secures a direct physical supply of electricity.
With an off-site PPA, the company agrees to purchase a set physical amount of electricity. However, the electricity does not directly come from the renewable facility, but rather is taken from the public grid.