Because of the current uncertainty brought by the corona pandemic and the impending recession, many companies have put their sustainability actions on hold. However, today’s crisis urges more than ever to take secure, sustainable actions.
With its locked-in fixed electricity rates, a Corporate Power Purchase Agreement (CPPA) offers strategic benefits for companies looking for a greater stability in their cost structure, as well as guaranteed green power supply. Since decarbonizing your enterprise is increasingly important, having a CPPA can help you stand out to consumers, investors and corporate customers. In addition, such a contract allows you to position yourself advantageously in advance of future bailout regulations conditioned by sustainability criteria.
Something new under the sun?
A CPPA is an agreement between a consumer and a renewable energy producer to purchase electricity, directly to producer, at a pre-agreed price and for a pre-agreed period of time. The agreement sets out the commercial terms and conditions of electricity sales: contract duration, delivery date/times, volume, price and product. CPPAs are often long-term contracts (usually between 10 and 20 years) and provide price certainty for both the consumer and the generator through fixed or floor price structures.
A CPPA is in itself not so different from an ordinary electricity supply contract where a company enters into agreement with energy suppliers (who may also be producers) for the purchase of green electricity. However, in the traditional model, utilities buy electricity from different generators, transport it over the grid and then deliver it to the consumer. It is consequently not always possible to determine whether you are buying green electricity, grey electricity (i.e. oil, coal or nuclear energy sold with Green Guarantees of Origin), or old green electricity (from hydro plants invested in a long time ago).
In a CPPA, the consumer is guaranteed green and local renewable energy. The electricity sold under a CPPA must come from existing or newly established renewable energy production units in a given location. A CPPA is therefore a reliable green alternative to the traditional model.
Helping you make the switch to 100% renewable
Setting up a CPPA is a complex process that requires expertise, a reliable network and deep market knowledge. If you are interested in sourcing renewable energy for your company, 3E’s Strategy and Policy team is ready to help you reach your sustainability targets. By assessing your current energy profile and PPA, and connecting with interested generators, balancing responsible parties and other corporates interested in aggregating, we will guide you through the process of sourcing affordable, local, renewable energy.
Based on our 20-year experience and many contacts in the renewable sector, we assist companies in making their energy consumption more sustainable. We also regularly advise government agencies on the current market situation and existing barriers for Corporate PPA’s.
Let 3E help you jump to the second curve!
Want to know how 3E experts can help you master your renewables Power Purchase Agreement? Get in touch through the contact form below to set up a call.