Understanding a PPA
A Power Purchase Agreement (PPA) is a contract between two parties: one who generates electricity (the generator) and one who purchases electricity (the offtaker). PPAs are long-term contracts to buy renewable energy in volumes and prices that meet the needs of both the generator and consumer, and provide long-term revenue and cash flow certainty—enhancing project bankability.
Why a PPA?
Companies looking to reduce their environmental footprint and energy costs can rely on a PPA to offset their consumption and lock in future energy costs. Renewable energy developers need the contracted revenue and revenue stability to finance and build new projects.
What are the benefits of a PPA?
Lock in all or part of your wholesale electricity costs. PPAs provide both long-term cost certainty and improved price visibility, mitigating volatility and electricity price risk.
Business sustainability. Choosing to enter into a PPA can help your organization reduce its carbon intensity, increase the sustainability of its supply chain, and help your company progress towards its renewable energy targets.
Enhanced brand and leadership. It’s more important than ever to be on the forefront of climate leadership, and PPAs are a great way to achieve this leading position. Want to know more? Contact us now.
How does a corporate PPA work?
|GE originates and structures a complete offtake solution, including a corporate PPA and a trader/utility trading services contract||GE works with stakeholders to structure a PPA that works for all parties’ business needs||Project bankability is increased through predictable revenue streams from the PPA||GE provides wind turbine technology, adapted to project needs through turbine supply and service agreements||Balancing costs are improved through innovative digital applications||100% green power delivered via Renewable Energy Certificates/Guarantees of Origin|
Why is a PPA right for developers?
Revenue certainty and risk mitigation = bankability.
The ability to enter into a longer fixed-price contract than is available on the local power exchange.
Timing can be more predictable as there is no need to wait for a new government auction to be announced.
Questions? We have answers.
New to PPAs? No problem. During the PPA process, we’re with you every step of the way, and our scope and role can be as wide or narrow as you’d like. We can help with:
- Preparing marketing documentation.
- Assessing offtaker’s energy consumption and formulate the vision and strategy for renewable energy and electricity procurement.
- Supporting and coordinating discussions and exchanges with all parties involved.
- Developing relationships with credit-worthy offtakers, enabling repeat contracts.
- Proposing Offtake Agreement Key Terms (price, tenor, volume, offtake structure) and identifying the best options.
- Taking part in negotiations to conclude Offtake Agreements, ensuring project returns and risk profile support investment.
It all adds up—to more renewable energy on the grid. Ready to get started? Contact us today.
When you choose GE to support you with your power purchase agreement you get the strength of more than 100 years of technological expertise.
You will also get access to GE’s:
- Capability to originate the PPA, through our extensive global corporate relationships
- Digital Wind Farm solution to lower your electricity costs
- Wide portfolio of renewable energy solutions, from onshore to offshore wind turbines to hydropower equipment
- Global footprint, as well as energy consulting and finance experience