New WBCSD report: How to understand corporate renewable PPA pricing structures and choose the right one for you
Recent years have seen more and more companies commit to reducing their carbon emissions. This has led to a huge increase in the uptake of corporate renewable Power Purchase Agreements (PPAs). More than 15 gigawatts (GW) in corporate PPAs have been announced so far in Europe. A record 4 GW alone were announced in 2020, and we are already on track to beat that record this year.
PPAs are a long-term agreement between a renewable energy producer and an energy consumer to buy renewables at an agreed price and quantity. That part is simple. However, there many different types of PPAs available and choosing the one that is right for your business can be challenging.
Each energy consumer will have factors specific to their business needs that they should take into account when choosing the PPA that is right for them. The right PPA for your business will vary based on the volume of energy that you will use, how much risk you are willing to take on and the credit standing of your company. Without specialist knowledge, it can be complex to understand the pros and cons of the different PPA pricing structures.
Happily, experts at WBCSD – one of the RE-Source Platform Founding Organisations – have produced an informative report that outlines different types of pricing structures, along with commentary on their respective risk impacts, regional variations and settlement considerations to help businesses understand feasible options that are suitable for them.
This comprehensive report will be invaluable to corporate buyers that are exploring their PPA pricing options and considering which one will work best for their business. The RE-Source Platform’s Renewable Energy Buyers Toolkit is also available to European corporates with more educational reports, webinar recordings, the European Corporate Sourcing Directory, a template PPA contract, and more.
We held a webinar on PPA pricing structures on Monday 7 June at 15 CET. The webinar was moderated by Lucy Hunt, Manager, Energy at WBCSD and she was joined by speakers from EY, LevelTen Energy, Aurora Energy Research and Iberdrola. There were short presentations and then a discussion between speakers on pricing structures and how best to manage risk.
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