Power Purchase Agreement (PPA)
The easy way to clean energy for corporate customers
Use solar power without investing in your own solar system? Become our partner as part of a power purchase agreement (PPA). We generate the electricity from renewable sources with our projects, you reduce your CO2 footprint and do something for the environment.
How does a Power Purchase Agreement (PPA) work?
A Power Purchase Agreement (PPA) is a long-term partnership between you as an electricity consumer and us as an electricity producer. We agree that you will use our electricity for your company over the next 5 to 15 years.
For whom are PPAs particularly interesting?
If your company wants to sustainably optimize its energy supply in the long term, but does not have the opportunity to invest in its own plant, a PPA is your solution. You secure your energy supply in the long term and benefit from a stable, market-independent electricity price. At the same time, you improve your environmental footprint and take a step towards achieving your sustainability goals.
What advantages do PPAs offer solar system operators?
With a long-term partnership under a PPA, the income from your plant can be planned for the long term – regardless of market fluctuations. For existing plants and plants whose subsidy period is coming to an end, a PPA is a lucrative option for continuing to generate clean electricity profitably.
The contract structure can be flexibly defined to suit your system and your requirements.
What advantages do PPAs offer energy consumers?
Energy consumers also benefit from long-term predictability: under a PPA, you can rely on the agreed energy prices for the agreed period. You position yourself independently of market developments and are future-proof.
At the same time, you know exactly where the electricity you use comes from. This means you can rely on solar power without having to operate your own solar installation.
Become our partner
Would you like to enter into a PPA partnership with us? Contact our Advanced Energy team and find out how we can work together.
FAQ
What is a Power Purchase Agreement (PPA)?
Power Purchase Agreement (PPA) is a contract between energy buyer and energy producer for the purchase/sale of renewable electricity. The agreement outlines all terms and conditions, including price, volume, and duration, under which the clean energy is sold.
What types of PPAs are there?
Different PPA models exist:
- In an on-site physical PPA, a developer generates renewable electricity from a facility located on the buyer’s own premises and delivers it directly to them.
- Off-site physical PPA is a contract for renewable energy generated at a remote location and fed into the public grid. A third party then “sleeves” that power to the buyer.
- Virtual PPA is a purely financial arrangement where no electricity is physically delivered to the buyer. Buyer and producer usually agree on a fixed price for a long-term, and then settle the cash difference between that fixed rate and the current market price.
Who are PPAs particularly suitable for?
PPAs are suitable for all companies committed to reducing their carbon footprint while securing long-term price stability.
What benefits does a PPA offer electricity consumers?
PPAs offer a fixed price for electricity, providing stability against volatile market prices and can lead to cost savings.
By purchasing renewable energy through PPAs, companies demonstrate sustainability commitment and track progress toward carbon offset goals. Supporting new renewable projects enables claiming additionality by fostering growth rather than opting for existing sources.
By purchasing renewable energy through PPAs, companies demonstrate sustainability commitment and track progress toward carbon offset goals. Supporting new renewable projects enables claiming additionality by fostering growth rather than opting for existing sources.
What benefits does a PPA offer investors and plant operators?
By locking in a fixed price over several years, long-term fixed-price PPAs provide renewable energy projects with predictable revenue and financial stability.
How long do PPAs typically run for?
Typical duration of the PPAs is 10 years, although the contract length can be shortened or extended based on the needs of the buyer and producer.
How is the electricity price set in a PPA?
The PPA price is negotiated among the parties, and usually agreed in one of the following structures:
- Fixed price: the price of electricity is fixed (e.g. in EUR/MWH) throughout the contract term.
- Fixed price with indexation: the price increases according to the pre-agreed escalator.
Discount to market with the floor: buyer receives agreed discount on the current market price in exchange for guaranteeing a price floor.
What role does GOLDBECK SOLAR play in the PPA model?
At GOLDBECK SOLAR, we offer tailored PPA solutions for the energy produced from the PV (+BESS) plants that we develop globally.
In which markets and countries does GOLDBECK SOLAR offer PPA solutions?
We offer PPA solutions in Germany, Poland, Ukraine, Netherlands, and Canada. We can further discuss opportunities in Chile and Kazakhstan.
How does GOLDBECK SOLAR assist with the structuring and implementation of PPAs?
We work closely with our clients to deeply understand their needs and to ensure our solutions evolve alongside their specific goals. This allows us to tailor an offtake solution that aligns with buyer’s unique profile. We focus on delivering balanced solutions that benefit both producers and buyers, fostering the long-term partnerships needed to advance renewable energy together.
