Power Purchase Agreements
Market sustainably generated energy profitably without subsidies – renewable power marketing without subsidies thanks to PPAs.
Are you planning or building a renewable energy plant, for example a ground-mounted solar plant? Are you evaluating the economic viability of your biomass, wind or solar farm which you would like to operate with or without government subsidies? Do you want to sell your renewable electricity at market prices and are looking for an experienced partner as a marketer (offtaker)?
Route-to-market PPAs offer a direct way for renewable energy producers to access electricity markets and secure revenue streams. These agreements ensure that your generated power is efficiently marketed and sold, minimizing risks associated with fluctuating energy prices. Whether your plant is subsidized or unsubsidized, a well-structured route-to-market PPA can help you navigate market conditions and optimize your revenue.
Greenfield Power Purchase Agreements (Greenfield PPAs) are already often an ideal solution for new renewable energy facilities with a capacity of 20 MW or more. Falling electricity production costs – especially for solar plants – rising electricity prices in the long term, low auction results, rising CO2 prices and an emerging demand from industrial companies ensure that plants can be profitable even without government subsidies.
Our renewable electricity offer
At Vattenfall, we have extensive experience with renewable electricity in various forms across many geographical locations. We work with both subsidized and unsubsidized projects, covering a variety of technologies across varying asset ages.
We would be happy to support you with our expertise in:
- Electricity optimisation
- Guarantees of origin (REGOs)
- Route-to-market PPAs, ensuring direct access to energy markets and optimal commercialization of your power
We would be happy to discuss the individual marketing requirements of your solar or wind park with you, starting from a total portfolio size of approx. 100 MW.
What do PPAs offer you?
With a Power Purchase Agreement, we guarantee the purchase of your renewable electricity and certificates, ensuring remuneration in accordance with the contractual agreement over the entire term of the contract. This allows you to avoid fluctuating or unpredictable electricity market prices and enjoy planning security for your electricity revenues. A PPA can be an important basis for your investment decisions and negotiations with financiers and banks as early as the planning and project development phase.
Route-to-market PPAs are particularly valuable in this regard, as they offer renewable energy producers a structured way to sell their electricity on the wholesale market, either through fixed-price contracts or market-based mechanisms. This flexibility allows asset owners to align their revenue models with their risk appetite and market expectations.
How does it work?
We take 100 percent of the electricity from your wind or solar park “as produced” or “as forecast.” Various pricing models are possible:
- Fixed price for each megawatt hour produced
- Fixed price for an agreed volume
- Combination of fixed price and variable share, e.g., based on the spot price
Guarantees of origin are delivered to Vattenfall based on the volume of electricity generated. The contract term can be three to ten years, or even longer, depending on the option.
We take care of all downstream energy management processes after pure delivery – including marketing risks, balancing group management, market communication, billing, and REMIT notifications.
Who benefits from PPAs?
For investors, a PPA makes the investment decision easier, because we take over all energy management activities after the delivery of electricity. For consumers, PPAs are a big plus, because industrial customers receive “real” renewable electricity from a specific regional plant. In this way, companies meet their environmental goals and promote the expansion of renewable energies – with the potential for excellent marketing opportunities. Finally, the environment also benefits, because PPAs guarantee the profitability of a plant or park and thus promote the expansion of renewable energies.
Services and advantages at a glance
- Purchase of 100 % of your wind and solar power "as produced" / "as forecast
- Delivery of guarantees of origin or REGOs based on the amount of electricity generated
- Protection against fluctuating electricity market prices and securing future electricity revenues
- Assumption of all energy management tasks for marketing the electricity
- Route-to-market PPAs for optimized market access
- Flexible pricing: fixed and/or variable
- Contract term: 5 to 10 years, or longer if possible
- Focus on UK, Germany, Netherlands, Denmark, Sweden, Finland, Norway, France
As a 100% state-owned Swedish company, Vattenfall is an experienced partner with a strong credit rating.
We develop optimal concepts for your needs
No matter whether you are an investor or operator of wind power and photovoltaic plants, manage the energy needs of an industrial company or are responsible for hedging for municipal utilities or regional suppliers.