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Business Model: Utility PPA

A utility PPA is a bilateral agreement between a generator (asset owner) and an energy supplier (or other balancing responsible party).

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Provided by: Energy Systems Catapult

Part of: Unlocking clean energy in Greater Manchester (UCEGM)

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Business modelling Power purchase agreements (PPA) Solar PV

A utility Power purchase agreement (PPA) is a bilateral agreement between a generator (asset owner) and an energy supplier (or other balancing responsible party). It is sometimes referred to as a ‘Merchant PPA’ or ‘Export PPA’.
 

This model could be enacted by local authorities as follows:

  • Local authority designs, builds and commissions solar generation asset.
  • Renewable energy generated by the solar asset is purchased by an energy supplier at an agreed upon volume and price (as stipulated in the PPA contract).
  • Electricity generated is exported to the power grid.
  • Energy supplier continues to facilitate the supply of energy to their existing customer base as usual.
  • There are a couple of arrangements for merchant PPAs; Fixed and flexible.
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