|Power Purchase Agreement (PPA)|
|European Union Electricity Market Glossary|
In a Power Purchase Agreement (PPA) a buyer generally agrees to take off power from a producer at conditions agreed in advance.
“Renewables power purchase agreement” is defined in Article 2(17) of Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast). According to this provisions it means “a contract under which a natural or legal person agrees to purchase renewable electricity directly from an electricity producer”.
A specific variant of a standard PPA is sleeving/third party netting, i.e. a PPA between a licensed supplier and a producer, which links the generation directly to the customer (it is used by non-residential producers or prosumers wanting to sell electricity directly to a final customer).
European energy market regulators (Regulatory Aspects of Self-Consumption and Energy Communities, CEER Report, Customers and Retail Markets and Distribution Systems Working Groups, 25 June 2019, Ref: C18-CRM9_DS7-05-0, p. 17) observe that in this instance the role of a licensed supplier is to emulate a peer-to-peer trade sharing arrangement by taking the electricity in question into its balancing perimeter and delivering it to the final customer. In that respect, the involved supplier manages the imbalance risk of the exchange.
3 October 2019
25 June 2019
18 June 2019
Corporate Renewable Power Purchase Agreements: Scaling up globally, WBCSD,
IFRS accounting outline for Power Purchase Agreements, WBCSD, January 2018
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|Last Updated on Sunday, 01 March 2020 10:09|