Managing volumetric risk of long-term power purchase agreements

Tranberg, Bo; Hansen, Rasmus Thrane; Catania, Leopoldo

doi:10.1016/j.eneco.2019.104567

Cited by 14 publications

(4 citation statements)

References 30 publications

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“…The data used for this paper were taken from the reports on various procurement tools employed by corporations, purchasing renewable energy in new ways, involving participants from an increasing number of industries. As far as corporations are concerned about procurement quality, Power Purchase Agreements (PPAs) are becoming the preferred instrument [16]. Such PPEs provide an optimal opportunity to obtain additional capacity, while being available for the most part only to large companies.…”

Section: Methodsmentioning

confidence: 99%

Emerging clean energy markets are drivers for solar and wind industries

Faminskaya

Potekhina

2021

E3S Web Conf.

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Emerging markets are rapidly developing and outperforming developed markets in terms of onshore wind and solar power. Moreover, emerging markets are now getting drivers for the enhancement of global renewable energy as they are seen as territories with the greatest potential for expansion of wind and solar capacities. This study aims to investigate the casual links between financial investments by gas and oil giants and long-term vision around clean energy. We analysed various reports on procurement tools used by corporations, purchasing renewable energy. This gave us an idea about the availability and frequent usage of different instruments employed around world. The empirical results show that state support and policy development both have positive impact on state and private investments in the long run. The influence of energy development is more evident in emerging clean energy markets. The findings of the this study suggest that as renewable energy targets price and performance parity with traditional sources around the world, and is getting able to improve grid efficiency thus strengthening its competitive edge with new technologies, the hurdles to its adoption are disappearing.

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Section: Methodsmentioning

confidence: 99%

Emerging clean energy markets are drivers for solar and wind industries

Faminskaya

Potekhina

2021

E3S Web Conf.

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“…Although many studies have been performed on the assessment of climate policy and emission reductions, according to Kumar [23], these studies have not assessed these types of contracts; the payment arrangements in PPAs establishing the costs of power transmission have to be as clear as possible. According to Tranberg [24], there is a negative dependence between wind power production and electricity spot price, this being a relevant factor which can be taken into consideration when we talk about the risk management of long-term PPAs. In their article, Taghizadeh-Hesary [25] affirmed that PPAs are the most appropriate way of attracting green investment, and they draw attention on the private system that should be more involved in taking part in reducing pollution.…”

Section: Power Purchase Agreement In the Scientific Literaturementioning

confidence: 99%

Identification and Analysis of the Key Factors That Influence Power Purchase Agreements on the Road to Sustainable Energy Development

Tantau,

Niculescu,

Fratila

et al. 2024

Sustainability

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The analysis of the key factors which prevent or contribute to the promotion and development of power purchase agreements (PPAs) in order to meet sustainability goals represents an important issue which is worth being investigated, especially given the situation which is entered into considering the bilateral relations inside this contract, which is meaningful to achieving new climate targets, developing and improving the use of green energy, and promoting a sustainable green economy. The main goal of this research is to identify and analyse the main factors which either help or prevent the promotion and development of a PPA in order to meet sustainability goals by promoting a green economy. For this research, a survey based on comparative analysis, questionnaires and interviews with energy experts, Spearman’s correlation matrix, and IBM SPSS Statistics for Windows are used. The results suggest that although there is a positive interest in and an open attitude towards PPA on both sides (sellers and buyers), there is still room for improvement; the lack of knowledge or insufficient measures taken so far are two of the reasons why, until now, in Romania, no PPA market has been developed, and the level of knowledge regarding this type of mechanism is quite low.

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“…Buying commitments Minimum energy (kWh) or power (kW) buying commitments Minimum commitments or priority dispatch [21,22,26] Product: Sufficient to construct the power plant [6,22] Contract term PPA duration (years)…”

Section: Rate (Price)mentioning

confidence: 99%

Accelerating the Energy Transition through Power Purchase Agreement Design: A Philippines Off-Grid Case Study

Barroco,

Vithayasrichareon

2023

Energies

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As renewable energy (RE) costs decrease, private non-subsidized revenue sources, such as power purchase agreements (PPA), will increase in off-grid areas. This paper’s objective is to improve policymakers’ and utilities’ understanding of PPA’s role in mitigating private investors’ risks in off-grid areas to accelerate the energy transition. The paper built a PPA dataset for the largest off-grid area in the Philippines and developed novel and efficient techniques to evaluate the risk mitigation ability of a PPA. While oil-based technologies are expensive, they are low-capital-intensive, and the fuel, the bulk of the cost, is passed through to consumers and primarily funded by subsidies. In contrast, the most affordable energy source, RE, requires higher upfront capital investments, financed primarily with equity. Investors chose low-capital-intensive technologies (oil), rehabilitated power plants, and utilized old equipment, all investment decisions to mitigate residual PPA risks, i.e., distribution utilities’ low creditworthiness and capital recovery uncertainty. Presenting the investment as a PPA residual mitigation tool is one of the paper’s contributions to the literature. The distribution utility needs to reduce investors’ uncertainty by covering reasonable investors’ costs. Policymakers need to level the playing field between fossil fuels and RE by reducing subsidies and strengthening distribution utility creditworthiness.

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Managing volumetric risk of long-term power purchase agreements

Cited by 14 publications

References 30 publications

Emerging clean energy markets are drivers for solar and wind industries

Emerging clean energy markets are drivers for solar and wind industries

Identification and Analysis of the Key Factors That Influence Power Purchase Agreements on the Road to Sustainable Energy Development

Accelerating the Energy Transition through Power Purchase Agreement Design: A Philippines Off-Grid Case Study

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