PPA - and after ?

PPAs (Power Purchase Agreements) have now become one of the major pillars of electricity supply for French companies. They serve as a long-term tool to hedge electricity supply prices and guarantees of origin. The recently enacted CSRD directive, which frames non-financial reporting at the European level, is expected to encourage companies even more to undertake their energy transition.

Integrating these PPAs into electricity supply represents one of the challenges buyers currently face. In the absence of market practices, it is essential to accurately analyze the various solutions, offers, and options provided by suppliers and aggregators, knowing that these are constantly evolving: which aggregation service(s) should be negotiated? With whom? Depending on these offers and options, the real cost of aggregation can vary significantly, as can the risks borne by consumers.

Therefore, it is necessary to ask the following questions, among others, before entering negotiations with suppliers and aggregators:
– Supply Contract: Should the PPA purchasing entity also hold the supply contract? Should the PPA be integrated into the supply or should the supplier be asked to repurchase the intermittent volumes from the PPA? In each of these cases, which price offer should be favored: indexed price or block + spot? How to cover residual supply volumes in electricity and guarantees of origin?
– Aggregation Services: Which electricity repurchase service should be chosen: as produced, solar bell, baseload? Should volumes be covered or left on the spot market? What are the resulting physical and financial flows?
– Link with the PPA contract: How to manage the uncertainty of the actual start of the PPA? What are the legal, accounting, and financial implications to anticipate?

In addition to support related to the development of renewable electricity supply strategy and the search for projects for the best technical, commercial, legal, and financial conditions in PPA contracting, the Power & PPA team at Greensolver assists consumers in understanding these issues and carrying out their supply and aggregation tenders.

Written by Delphine Strunski, senior advisor in our PPA Advisory Services Team