PPA Advisory

Power Purchase Agreements (PPAs) guarantee stable electricity prices and support new renewable energy capacity. Ecohz’ PPA Advisory ensures businesses get the most out of these contracts and guides companies every step of the way, from choosing the right project to negotiating terms that deliver on clean energy and financial targets.

Speak to an advisor

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What is a PPA?

A Power Purchase Agreement (PPA) is a contract wherein an electricity producer agrees to provide a consumer with a given volume of energy –typically through the public grid – at a stable price.

Typically signed for multi-year periods, PPAs guarantee the consumer –known as an off-taker– hedging against volatile energy markets. At the same time, they afford developers a steady, long-term source of income that makes new renewable energy projects, such as solar or wind parks, viable.

Off-takers can commit to purchasing the totality or a fraction of the volume produced by the chosen project. The delivery of renewable energy is documented with Energy Attribute Certificates (EACs) that allow consumers to report reduced Scope 2 emissions. Read more about PPA here.

Types of PPAs

There is a variety of PPA models. Some focus on the physical delivery of energy or price hedging, while others emphasise location and additional clean energy capacity.

Based on the location:

Off-site	Renewable energy is produced away from the consumption site. Electricity is delivered through the public grid, and EACs are used for documentation.
On-site	Clean energy is produced close to or where it is consumed. These agreements bypass the public grid, delivering electricity from the source to the consumption site via a private wire. Clean energy consumption is not documented with EACs.

Based on the delivery of energy:

Physical (sleeved)	Physical electricity is provided to the off-taker, along with EACs bundled with the underlying power. Consumers can either cancel the certificates or resell them. The buyer is responsible for the cost of balancing the grid.
Financial (virtual)	Physical electricity is not delivered to the off-taker, who only gets EACs for the agreed volume at the convened price. Consumers buy power from a third-party provider, with the producer settling the difference between the agreed energy price and the market value. The seller is responsible for the cost of balancing the grid.

Why should you consider a PPA?

PPAs secure cash flows for renewable energy projects. For off-takers, this results in energy supplies below market prices. In turn, PPAs lower the cost of financing for project builders and offer improved business opportunities.

Cost reduction

Consumers receive energy at low, stable prices while they reduce the cost of debt for project builders.

Risk management

Steady income mitigates risk and attracts other sources of financing for new renewable capacity. Buyers enjoy fixed electricity prices for the duration of the contract.

Reduced carbon footprint

Consumers replace fossil energy with clean power, slashing greenhouse gas emissions.

Additionality

Secure financing makes renewable projects viable, directly contributing to new capacity that would not exist otherwise.

Guidance for maximum impact

Speak to an advisor

Ecohz makes PPAs more accessible for your organisation. We identify relevant projects, evaluate their quality, quantify the financials, and assess risks to secure the deal structure best suited for your business. The modules of the PPA Advisory:

1. Pre-study

We discuss your current strategy and emissions profile to understand where you stand and your goals.

2. Market analysis

We provide a complete market overview of your geographical location, including regulations and risk analyses.

3. Project evaluation

Based on your needs and targets, we produce a list of potential projects that fit your requirements.

4. Term sheet negotiation

We guide you through negotiations with producers and ensure that contracts tick all your specifications.

Verification and EACs management

We support you with the paperwork related to your contract. We take care of invoicing and monitoring the project’s performance. Also, we manage all incoming EACs, cancelling certificates on your behalf and producing documentation for reporting.

The impact of PPAs

At Ecohz, we believe the best solution for your business can also have the highest possible impact. Combining your support of newbuilt renewable energy capacity with Energy Attribute Certificates results in tangible climate action aligned with long-term business needs.

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Why Ecohz

We simplify how companies use a suite of sustainability solutions and walk with you every step of the way to tailor PPAs to your goals.

Our advisors conduct personalised assessments and provide individual counsel to each of our clients, putting our extensive know-how at your disposal and breaking complexity into manageable tasks.

Renewables in the energy mix contribute to SDG 7 and 13.

PPAs explained: what you should know about Power Purchase Agreements

PPAs are increasingly important in corporate sustainability strategies due to their role in creating clean energy capacity and benefits for consumers and producers. There are, however, unanswered questions that make potential buyers unsure if a PPA is right for them. And we answer them in this article.

Read the article

EAC Management

Correctly managing Energy Attribute Certificates (EAC) from Power Purchase Agreements (PPAs) is essential to achieving full recognition for using renewable electricity. Ecohz takes care of this process from start to finish to ensure that you comply with regulations, meet global standards —such as CDP, SBTi and RE100— and confidently communicate your clean energy accomplishments.

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PPA: Construction of wind farm started to power Asahi's Polish breweries

Lech Nowy Staw wind farm covers 100% of Asahi’s Polish breweries' power needs. Ecohz was the advisor on the first PPA in Poland not benefiting from state subsidies.

Preben Munch
Senior Director Sales & Solutions

Lars Semb Maalen-Johansen
Renewable Portfolio & PPA Manager