Power Purchase Agreement
The Power Purchase Agreement (PPA) is a special (demand-driven) electricity supply contract in which one contractual partner is usually a power plant operator or independent power producer , the other a larger buyer (company, electricity trader, supplier). In Germany PPA initially by eliminating the service area monopolies and by Energy Act prescribed unbundling of the power sector or independent transmission system operators gained in importance. In the context of the energy transition , they are an important instrument for financing and operating power plants in the renewable energy sector independently of the Renewable Energy Sources Act and for supplying customers with green electricity in the long term . PPAs can be differentiated in particular according to contracting parties and agreed network usage.
meaning
A PPA sets out all of the commercial terms and conditions for the sale of electricity between the two parties, including when to enter into the contract, schedule for electricity delivery, under-delivery penalties, payment terms, and termination.
There are many forms of PPAs today that vary depending on the needs of the buyer, seller, and financing partner. PPAs, on the other hand, can be used as a hedge against rising electricity prices due to their longer term.
The contract period can be between 5 and 20 years, during which time the electricity buyer buys energy and sometimes capacity and / or ancillary services from the electricity producer. Such agreements play a key role in the financing of power generation plants.
In the case of decentralized electricity generation (in which the generation plant is supplied directly to the customer without using the public electricity network), commercial PPAs have developed as a variant that e.g. B. Enables companies to buy electricity directly from the producer and not from the utility company. This approach makes it easier to finance decentralized generation systems such as photovoltaics and wind turbines. A distinction can therefore be made between different types of PPAs. In this way, electricity is delivered directly to a consumer such as B. a company referred to as a "corporate PPA". If the customer is an electricity trader who markets the electricity further, the PPA is referred to as a "merchant PPA".
According to a recent study by the PPA barometer from Energie & Management , wind and solar projects financed through PPAs will only account for 1% of the installed green power plant capacity in Europe by 2020. But the rate is set to skyrocket by the mid-2020s, and PPAs will therefore also become an important driver in Germany.
Germany
In Germany, PPAs are becoming increasingly important for renewable energy construction projects. Due to the current EEG guideline and the resulting feed-in tariff, PPAs have so far not been widespread in Germany. With the end of the funding period in 2021, PPAs can continue to generate electricity economically using renewable energies such as wind turbines. So they offer a possibility of follow-up financing of the plant operation. The financing of new systems is also realistic due to the increasing competitiveness of renewable energies and falling feed-in tariffs.
Individual evidence
- ↑ Deutsche Energie-Agentur GmbH: dena-MARKTMONITOR 2030: Corporate Green PPAs , status 07/2019 , accessed June 4, 2020
- ↑ Fabian Huneke, Simon Göß, Omar Dahroug, Johanna Österreicher: Power Purchase Agreements: Financing model for renewable energies . Ed .: Energy Brainpool GmbH & Co.KG. Berlin January 2018.
- ↑ a b Power Purchase Agreement (PPA). November 15, 2018, accessed January 5, 2020 .
- ↑ The PPA Barometer 2019 | E&M. Retrieved April 18, 2020 .