Your One-Stop PPA
All you need to maximize your export power revenue
- ^Price Forecasting
- ^Online Tendering
- ^Bid Analytics
The Renewable Exchange platform connects you to a market of offtakers for an effective PPA tendering process. Manage and understand your asset’s performance and the power market movements with accurate data and clear market insights.
How It Works
5 steps to secure a PPA
- Understand where the power market is at and if it’s the right time to tender using the PPA price forecast.
- Launch your PPA tender in 3 clicks. Set the bid submission date at a time convenient to you. Go out to the entire market or your select-few offtakers.
- View bids on a single results screen and compare them like-for-like with our smart results analytics.
- Decide which PPA offtaker you want to work with and select the winning bid.
- Accept and finalise the contract online.
Your Platform, Your Way
Discover the most effective way to manage your PPA’s
Effortless PPA management
Access all the information from one dashboard
Whether you own a single turbine or a complex portfolio of renewable energy assets, managing your PPAs is easy and efficient through the Renewable Exchange platform. Get a clear view of your PPAs, launch tenders and sign contracts straight from your account dashboard.
Accurate price forecasting
See the most accurate PPA price forecast specific to your site
You can now make confident decisions about your renewable energy assets based on real data adjusted to your site. We analyse over 10,000 data points in every forecast to bring you the most accurate estimate of the PPA price you can achieve.
You can also set up trigger price alerts to stay on top of the price movements even on the go.
Simple online tendering
Show your site to the entire market in one go
Launch a PPA tender in minutes from your account dashboard and reach multiple utilities ready to bid for your power. Offtakers can submit their bids instantly. The blind auction process ensures that the bids are most competitive and reflective of power market movements. The tender can be simply managed through the platform and run at a time convenient for you.
Easy bid comparison
No more confusion over embedded benefits and seasonal pricing structures
PPAs can often be presented in different formats. Renewable Exchange analyses every bid and presents the results back to you in a clear view allowing for like-for-like comparison. See the complete breakdown of prices, including embedded benefits, ROCs and REGOs. You can now be sure that you’re choosing the best PPA rate, with no hidden charges or reduced benefit payments.
Effortless online execution
Choose the winning bid and sign PPAs online
You are in control of the entire process – choose the winning bid on the results screen and sign the contract online. You won’t ever have to miss out on a great price because of market movements or bureaucracy. With the Lightning PPA you can execute the agreement immediately by submitting a digital signature via the platform – from your computer or mobile phone.
PPA offtakers – who bids for your power
There are now 28 offtakers (PPA providers) registered on the Renewable Exchange platform. PPA providers on the platform are utility companies (energy suppliers) registered in the UK and able to purchase power directly from renewable energy generators. The offtakers are free to decide which assets they want to bid on. They cannot see each other’s bids as the tender process is a blind auction. They will therefore always aim to provide the best PPA price bid possible.
The offtakers receive feedback on all their bids to better understand why they were successful or unsuccessful in their efforts. This helps them put together more competitive bids.
Majority of offtakers now use the Lightning PPA – our standardised power purchase agreement developed to create a fair and clear contract for the generators and offtakers. Using the Lightning PPA makes the bid acceptance process really simple: once the generator accepts the bid online through the platform, they are able to digitally sign an immediately binding contract and secure the PPA price.
- What is a PPA (Power Purchase Agreement)?
- A power purchase agreement is a long-term contract to buy and sell power. It is signed between a power generator (a renewable energy asset owner or manager) and an energy buyer, often referred to as an offtaker. A PPA can also be called a power offtake agreement.A PPA ensures a predictable revenue from the sale of export power for the power generator. Energy buyers are interested in green power purchase agreements to benefit from full traceability of the renewable energy purchased and to show their engagement in the energy transition.
There are a few different types of PPAs recognised in the market, depending on the arrangement (physical or synthetic/virtual) and the contracting party (a Merchant or Utility PPA where the offtaker is a licenced energy supplier which then sells the power onwards; or a Corporate PPA where the offtaker is the power-consuming company).
A PPA is always signed with specific terms agreed, including volumes traded, the pricing structure (fixed price or indexed to an exchange market), contract duration (a standard being 1-5 years), payment terms (e.g. monthly or quarterly) and purchase of any renewable energy certificates available (ROCs, REGOs, GoOs).
PPA price can be set fixed for the contract duration or variable and indexed to a wholesale exchange market.
- Is a PPA a good idea?
- There are many advantages to power purchase agreements (PPAs) for both the renewable energy generator and the buyer.
For the energy generators:
- PPAs offer the energy generator long-term revenue stability for their export power sale – the revenue stream is guaranteed as long as the project is operational and generating electricity.
- Having a PPA in place is less risky than trading power on the live exchange market which fluctuates a lot.
- A PPA with a creditworthy offtaker means generators can expect timely payments.
For some subsidised assets, e.g. a site receiving Feed-in-Tariff support, a PPA is an alternative route-to-market which works alongside the FiT. A PPA can be arranged to replace the export element of the FiT support, while the FiT generation payment remains in place.
A power purchase agreement is often required to guarantee investment for a newly commissioned project. This type of agreement requires special terms to ensure both parties are protected in case of delays in project commissioning.
For the energy offtakers (buyers):
- A PPA ensures long-term electricity cost stability (no unexpected price rises). It is a hedge against long-term power price fluctuations.
- Entering a PPA offers a buyer the opportunity to fund or support a renewable energy project and receive a confirmation of energy supply being green through “green certificates” such as the REGOs (Renewable Energy Guarantees of Origin). This may also be required to meet renewable obligations set by the government.
- How does a PPA work?
- A power purchase agreement is a contract for a fixed duration of time.Ahead of the PPA start date, the energy meter for the renewable energy asset needs to be registered with the contracting offtaker. The offtaker is then able to monitor the half-hourly production data for the site and pay the generator accordingly (in a pay-as-produced agreement). Payment terms are agreed in the PPA. A typical arrangement is for monthly payments.
A PPA can be signed months and even years in advance. Some contracts may fall into a rolling contract if a notice is not provided 30 days in advance of the agreement end date.
Securing a new power purchase agreement is simple with Renewable Exchange:
As a renewable energy generator, you can advertise your asset and the export power capacity through the Renewable Exchange platform by launching a PPA tender. Offtakers registered on the platform can submit their bids for your export power within a set deadline. You will be able to view and compare all the bids through your account. You are then free to decide which offtaker you wish to work with. A PPA can be signed online through the platform creating a binding contract and securing the PPA price. Read more about the Renewable Exchange PPA tendering platform here.
- How are PPA prices determined?
- PPA prices are determined based on the market with discounts and risks calculated into the price.The power is traded on the market for different terms in the future. The spot market looks at the most immediate future, e.g. hour-ahead or day-ahead. Future markets look further out at power traded e.g. a month ahead or a season later.
Variable (or indexed) PPA prices are directly linked to the financial markets where power is traded and change daily or monthly depending on the type of contract. That means that with an indexed PPA, you can benefit from price spikes in the market but would also be affected by price drops.
On the other hand, fixed PPA prices offer more stability and security in terms of expected revenue as the price is set for the whole duration of the contract.
Electricity prices depend on many different factors, including:
- Gas supply security and gas storage levels in the country: this relates to the overall ability of the power system to generate sufficient amounts of electricity. Gas is currently the main source of power in the UK and the basis of energy security for the country. As more renewable energy sources are added in the years to come and better power system management options are introduced, the impact of gas supply and storage will be lessened.
- Supply and demand: when demand on electricity increases, so does its price. The demand is predominantly affected by weather and time of year: during colder and longer winter months, more energy is needed for heating and lighting.
- Weather and renewable power generation: on windy days, we’ve got more wind power; whereas when there’s little wind our reliance on gas power increases. The weather changes and weather forecasts can heavily impact power prices. Weather can be very unpredictable hence it often adds to market volatility.
- Carbon pricing: emission trading for carbon dioxide and other greenhouse gases is a method put in place among others in the UK and EU in order to accelerate investments into low carbon sources of energy. The price of carbon allowances impacts the price of power; they are charged in £/MWh.
All these factors have varying strength and are often interlinked. Geopolitical changes can throw off any forecasts and change the energy landscape completely. This means that the power market fluctuates a lot and is very unpredictable long term.
To help you choose the best time to tender a PPA, we monitor the market for you. On the Renewable Exchange platform dashboard, you can see an accurate PPA price forecast which will tell you what PPA price you could achieve if you tendered that day.
- What are the types of power purchase agreement?
- There are a few different types of PPAs recognised in the market, depending on the arrangement structure and the contracting parties.Physical PPA: in this type of a PPA, the physical power is delivered to the buyer (offtaker). The truly physical PPAs can only be completed with direct or onsite connection of the consumer to the generating facility, e.g. where a wind turbine is located next to a factory using the power generated. In reality, most assets send their power into the grid which means it immediately becomes untraceable. However, many contracts are still referred to as physical PPAs where the buyer receives the renewable certificates associated with the power generated.
Virtual PPA: in this type of a PPA, the power is sent into a grid and the buyer can purchase the power and associated renewable certificates independently from each other. In both circumstances, where the power is sent into the grid via a metered connection, a utility is needed to help manage the balance and ensure the supply of electricity to the end user is stable and continuous (whether the end user is part of the agreement such as in a Corporate PPA or not). A Virtual PPA is a more flexible agreement as is not restricted by the location of the contracting parties.
Merchant or Utility PPA: this is a power purchase agreement where the offtaker of the power generated is a licensed energy supplier (a utility or energy retail company). The offtaker is then free to sell the power onwards to consumers (private or corporate) under a separate energy supply agreement (or import agreement). All PPAs traded through the Renewable Exchange platform are Utility PPAs.
Corporate PPA: this is a power purchase agreement where the offtaker of the power generated is a consuming company. In a direct Corporate PPA, the generating asset is directly connected to the facility (e.g. a factory). In an indirect Corporate PPA, the power generated is sent into the grid and a utility (or energy retailer) is required to help manage the balancing of power delivered to the end user (the corporate counterparty). As the consumer typically wants to ensure the lowest possible price for power, this type of contracts usually take a long time to negotiate so that both parties are happy with the end result and the price agreed.