With energy prices at an all-time high, you wouldn’t naturally think that now is the time to lock in a long term PPA. But that might not be true, as Mark Knights explains.
Energy Market pricing might be at an all-time high, but the forward price of power 3-4 years out is somewhat lower, which leads me to think that there is a great opportunity to begin seeking a good renewable development partner.
Your boss may not entertain a long-term wholesale market fix at £65-£75/MWh (where the current curve is 4 years from now), but markets may not be far away from finding a price level which business leaders might see as a sensible risk managed approach to reduce exposure.
The value of REGOs has also soared, which suggests that consumers are now more widely seeking to use renewable power to abate some of their net zero ambitions and the green power demand isn’t just high in the short term – REGO prices are high as far as the next 6 seasons.
“At Juvo Energy we believe that now is the time to start to think about a different type of procurement approach and getting ready early is going to become really important, otherwise again, we’d expect demand to exceed supply”. Knights adds “As a high energy consumer you want to get a choice of projects, so that size, location, scale and renewable credentials match up”.
A Corporate PPA allows a consumer and renewable generator to agree terms of sale for electricity and associated renewable certificates. It will cover things like how imbalance is managed, and other associated costs and benefits for the power project. The consumer takes the benefit of being less exposed to the wholesale market, and project developer gets the project financed with the PPA guarantees.
Whilst the likes of Amazon, Google, Ikea, M&S, and other large corporate buyers have been first movers in this space, there is much more now going on, including sharing of PPAs within consortium approaches.
Juvo Energy helps seek corporate partners for renewable energy developers. To find out more contact us at info@juvoenergy.com
