In an industry that is constantly evolving, longer-term price certainty is an important factor for many renewable projects and a Corporate PPA is one way to achieve this.
A Corporate PPA is an agreement between an electricity generator and a business with an interest in purchasing renewable electricity, where the business agrees to buy power generated from the project at an agreed £/MWh price over a fixed period without a physical connection. An electricity supplier “sleeves” the power between both parties and manages the imbalance between supply and demand and the parties’ day-to-day requirements.
In recent years, Corporate PPAs have become increasingly popular, both for generators that want to lock in a longer-term fixed price or a possible premium for their generated power and for businesses that want to manage their energy bills or to reduce carbon emissions. However, there are challenges to overcome with Corporate PPAs, such as identifying a counterparty with compatible volumes, price expectations, and desired contract length.