There are two sides to managing profitability costs (which we`ve discussed a lot here) and revenue. Let`s talk about sales. In the renewable energy space, your site`s revenue source depends on how they sell their electricity or how they buy their electricity – the latest (and exciting in my opinion) trend of which the direct/company-owned PPA is. Draft Long-Term Power Purchase Agreement (PPA) prepared by the Central Electricity Regulatory Commission of India (CERC) (for projects where location and fuel are specified) (pdf) – Draft Power Purchase Agreement developed by CERC for the Indian IPP market – for long-term agreements (more than 7 years) to be used in the construction of power plants where the location or fuel is not specified. The attached link is the draft call for proposals – for the PPA project, go to page 70. The Power Purchase Agreement (PPA) for small rural energy projects is part of a series of documents prepared by an international law firm for use in small rural energy projects. Documents prepared for the Southeast Asian country. Project finance, as the name suggests, is about attracting capital to build projects, whether through lenders (debt) or investors (equity). In general, lenders and some equity investors will only refrain from using the project proponent (an essential basis for project financing) if they are satisfied that the cash flows expected from the project can be used to repay loans or generate reasonable returns on equity.

For large wind energy projects, future cash flows are guaranteed by a « removal agreement » – an agreement between the project company and the party purchasing the energy and related products that the project will produce and deliver over time. The type of buyer depends on several factors – location, market conditions, and the risk appetite of the parties, to name a few. The continued commitment to renewable energy generation in 2021 means that purchasing companies continue to be key drivers in the development of new wind and solar power generation projects in the United States. The number of megawatts varies depending on the source; However, there is no dispute about the important role that companies play. While corporate customers initially focused on wind generation, corporate customers now regularly enter into solar generation contracts. As with traditional PPAs, the long-term creditworthiness of the client is crucial when it comes to corporate PPAs. Many business customers have a strong credit rating, but corporate PPAs may also provide for a guarantee from a solvent parent company and the publication of a letter of credit if the creditworthiness of the customer or parent guarantor decreases. The client usually requires specific commitments from the client during the operational phase to ensure that the project operates in accordance with industry best practices and that no operational risk poses a significant threat to the client`s business. The main implications are twofold.

First, the proponent must ensure that certain project management skills and procedures are in place to meet these obligations (communication procedures, operational and financial reports, measurement requirements, availability of anticipated failures, etc.). Second, the project owner must ensure flexibility under the PPA in order to optimize operations and maintenance activities and maximize the project`s EBITDA. Kenya – Power Purchase Agreement (PPA) – The simplified agreement for Kenya develops a short form of relatively simplified power purchase agreement developed for the Kenyan Electricity Regulatory Board for use in « hydroelectric, geothermal or gas-fired power plants ». It anticipates both a capacity load and an energy load. The seller must sell all the net electrical power of the system to the buyer. The Energy Regulatory Commission also provides a link to a PPA template for large renewable energy producers over 10 MW and an PPA for small renewable energy projects under 10 MW on its renewable energy portal. An enterprise solar PPA is a removal agreement, like any other removal agreement with a utility company, and can be available in as many variants as a utility PPA. There are examples of this type of PPA listed below.

The PPAs in the sample were divided into those that are more relevant for small rural energy projects and the more complex PPAs that are relevant for large projects in developing countries. .