It defines a support model in which the parties to the agreement agree on a reference price. In the event that market energy prices are lower than the reference price, a positive difference is paid to the supported party. Otherwise, when energy prices are higher than the reference price, the supporting party receives that difference.

It is a long-term electricity supply agreement between two parties, typically between an electricity producer and a Customer (electricity consumer or retailer). The Power Purchase Agreement (PPA) specifies all the conditions related to electricity, including the quantity of electricity to be delivered, negotiated prices, accounting methods, and penalties for non-compliance. In practice, PPAs are distinguished between physical delivery agreements and virtual agreements.

An agreement between two parties, in which the buyer (usually a company or institution) commits to purchasing a specific quantity of electricity from the supplier. The electricity is generated on-site, within the buyer’s property or in close proximity, and transmitted through a direct line. On-Site Power Purchase Agreements (PPAs) are particularly popular for procuring energy from renewable sources such as solar or wind power, located on the premises of the buyer.

Here are some key features of an On-Site PPA:

• source location – in an On-Site PPA, the energy source (e.g., solar or wind power facility) is situated on the buyer’s property or in close proximity. This could involve installing solar panels on building rooftops or wind turbines on the company’s premises.
• contract duration – On-Site PPAs can be long-term, typically ranging from several to several dozen years. Long-term agreements help energy providers recoup investments in energy infrastructure.
• energy price -under a PPA, the price of the purchased energy can be agreed upon as fixed throughout the contract duration or linked to competitive rates. This helps buyers control energy costs and avoid market price volatility.
• investments and maintenance – in some cases, the energy provider is responsible for investing in infrastructure and maintaining the energy source. In other cases, the buyer may invest in the energy source and manage its maintenance.
• financial benefits – On-Site PPAs can bring financial benefits to both the buyer and the energy provider. The buyer gains access to more economical energy sources, while the provider can ensure a steady income from supplying energy over an extended period.

The Role of Renpro in Agreement Execution

As part of the balancing group, which is a unit on the electricity market schedule, Renpro handles the physical settlements of energy flows. Participants in the agreement do not incur costs for distribution or transmission services.

On-Site PPAs allow businesses and institutions to generate their own electricity from renewable sources on-site or in close proximity. This helps reduce energy costs, lower greenhouse gas emissions, and meet sustainability goals. Before signing such an agreement, it is advisable to consult with an energy expert or a lawyer specializing in PPAs to ensure appropriate terms and a clear understanding of obligations on both sides.

An agreement between two parties in which the end consumer (typically a company or a local government institution) commits to purchasing a specific quantity of electricity from Renpro. However, the electricity is generated outside the buyer’s location, often in a remote area. This type of agreement is particularly popular in the context of renewable energy sources.

Here are some key features of an Off-Site Power Purchase Agreement (PPA):

• location independence – in an Off-Site PPA, the energy source (e.g., wind farm, solar power plant) is located on a property different from the buyer’s.
• contract duration – Off-Site PPAs are typically long-term, often spanning several to several dozen years. Long-term agreements allow energy providers to recoup investments in energy infrastructure.
• fixed or discounted price – under a PPA, the buyer usually negotiates a fixed price for purchasing energy over a specified period or a price based on a competitive rate lower than current market prices. This helps buyers control energy costs and protect against price volatility.
• sustainable development – Off-Site PPAs are often used by businesses and institutions as a tool to support sustainable development and reduce greenhouse gas emissions, as they often involve purchasing energy from renewable sources.
• energy transmission – energy produced outside the buyer’s location can be transmitted to the point of use through transmission or distribution lines, requiring specific agreements and arrangements with energy providers.
• financial benefits – Off-Site PPAs can bring financial benefits to both the buyer and the energy provider. The buyer gains access to more economical energy sources, while the provider can ensure a steady income over an extended period.

The Role of Renpro in Agreement Execution

As part of the balancing group, a unit on the electricity market schedule, Renpro handles the physical settlements of energy flows. Participants in the agreement independently bear the costs of distribution or transmission services.

Off-Site PPAs are becoming increasingly popular in the business environment as they allow companies to engage in sustainable development and reduce energy costs. However, such agreements can be complex and require consideration of various factors, such as the location of the energy source, contract duration, and pricing structure. It is advisable to consult with a Renpro expert for detailed assistance in implementing such agreements.