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Energy Purchase

Bettergy offers companies a complete energy consulting service, management of consumption and costs of production processes, acting as a communication link with the Electric System.

Within this advice, we not only advise on the purchase at a fixed price, but we are also acting:

  • Advising on the purchase to pool (indexed).
  • Purchase from pool with hedging in futures markets.
  • Direct purchase to the market or bilateral contracts (PPA).

A PPA, acronym for Power Purchase Agreement (in Spanish, power purchase agreement), is a contract between two parties, one of which generates electricity (the seller) and the other of which intends to buy electricity (the buyer).

The contract or PPA defines all the terms of the sale of electricity between the parties, including when its operation will begin, deadlines for the delivery of electricity, penalties for non-compliance, terms of payment and termination of the contract.

At a global level, there are successful cases of PPA for 20 or 25 years, however, in Spain, the proposals that are being made fix the duration of the contracts between 5 and 10 years at most.

There are different types of PPAs on the market, mainly Physical and Financial.

  • Physical PPAs are agreements between buyer and seller, in which the term, the amount of energy and the purchase price must be agreed, as well as the generation plant and the consuming plant or delivery points. There is a risk of non-compliance, derived additionally from the physical nature.
  • Bilateral financial contracts allow the risks associated with the physical contract to be minimized, making the settlement or contracting for differences. It is more flexible, the parties agree to exchange the price differences between the price agreed in the contract and the closing price in the reference market.

This indirect PPA is usually formalized in the electricity sector, when a developer carries out a generation facility with renewable energies in the most appropriate place and discharges that electricity produced into the national electricity grid. In this case, the seller and the buyer formalize a contract on the rights of the electricity generated, the buyer obtaining a cheaper price than the usual market and the generator a stable electricity sale price that gives the project profitability.

Bettergy helps energy distribution or trading companies to structure the achievement of PPAs in different stages of development or even “Ready to build”, in charge of promoters with extensive experience, solidity and the ability to close firm agreements.

PPAs will play an important role in the electricity market, from Bettergy, we can help you in the following way:

  • General advice on the best way to purchase energy among the alternatives on the market.
  • Selection of PPA typology.
  • Identification of the best renewable generation project or developer.
  • Technical analysis of the photovoltaic or renewable solar project.
  • Legal, financial articulation and negotiation of the PPA.
  • Management of guarantees of origin.

Get in touch with us through comercial@bettergy.es or by phone 952-025-789

This post is also available in: Spanish