It is a key strategy for companies to move forward on their sustainability journey. A virtual PPA opens up access to renewable energy on a large scale for large and small companies, giving them the opportunity to have a flexible solution tailored to their objectives.
A VPPA is a bilateral agreement for renewable energy from a particular plant, the electricity produced by it is made available to the Electricity Market where it is marketed, although the customer does not directly receive the energy generated by the plant but continues to receive it from the supplier.
In this case, the cost of energy is fluctuating since it is determined by the Market, which generates variations between the Market price and the price agreed within the PPA. In other words, when the PPA cost is lower than the Market cost, the supplier pays the customer the difference of the energy produced by the plant. Otherwise, if the Market cost is lower than the PPA cost, the customer pays the difference back to the supplier. If energy prices increase above the agreed threshold, your company will benefit from the savings based on the amount generated and the positive price difference (contract for difference).
Since the customer does not physically receive the energy, certificates (RECs) are issued to guarantee its green origin.
The virtual PPA is considered a flexible solution and one of the most preferred by companies, especially for those with diverse locations. It is considered to be the energy contract of choice for industries seeking to accelerate their sustainability goals.