Question 1

What are the benefits of a PPA?

Accepted Answer

A PPA is the key revenue document for any renewable generation project. PPA gives the stability of maintaining a discount-to-market price at all times, while still allowing to profit from energy price peaks. A PPA can also be used for medium and short-term power sales, where parties require a more bespoke arrangement than a simple sale of power under an energy trading contract.

Question 2

How far in advance can I agree on a short-term PPA?

Accepted Answer

You can contract your renewable asset as long as prices are available in the market for your entire contract duration. Depending on the utility we speak to, this could be anywhere between 24 to 60 months from the present day. We have tenders already tracking the market with start dates 3 years from now.

Question 3

What's the difference between a fixed annual and a fixed seasonal price?

Accepted Answer

A fixed price refers to the agreed upon price for every kilowatt hour (kW/h) or megawatt hour (MW/h) that cannot be changed at any point in the contract. If a generator and supplier agree on £100 for every 1 MW/h, then that will be the fixed price for the duration of the PPA. A fixed annual price refers to the set price offered by a supplier for the entire contract period. If a 12-month PPA is signed, with both parties agreeing on £100 every 1 MW/h, then that is the fixed annual price for the duration of the contract. A fixed seasonal price is the supplier's set rate for either the Summer (1st April to 30th September) or Winter (1st October to 31st March) season. Depending on the market conditions during each season, the fixed seasonal price could boost revenue or yield lower profits compared to a fixed annual contract.

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