Power purchase agreements are contracts between energy buyers and developers. They give the developer the guarantee that the buyer will purchase electricity produced from renewable energy facilities. In a virtual AAA, the company developing the renewable project sells the electricity to the grid when the project is completed. To obtain financing, the developer finalizes a virtual PPA with a third party – let`s call this part ACME Co. ACME Co. ACME Co. guarantees the owner of the renewable project a certain fixed price for the electricity they sell to the grid. If the electricity is sold for less than the guaranteed amount, ACME Co. will pay the difference; If electricity is sold to the grid for more than the fixed price, ACME Co. will actually make money.
In this agreement, there are a few benefits for all parties: the developer of the solar installation or wind farm has the price security they need to secure financing for the project, and ACME Co. has the opportunity to make money. Now, project developers cut out a project and sell the parts to multiple buyers. This is called aggregation — and it has the potential to change the industry. With aggregation, a developer doesn`t need to find a utility or a large company first. Multiple buyers can buy most of the energy the project will produce together, allowing the developer to secure financing. Thanks to the opening of the project, buyers who do not need extremely large amounts of energy can now participate in the EPAs. As the supply of renewable energy and the reporting of energy consumption and emissions in companies is increasingly taken into consideration, obtaining bundled CERs will be the best method to achieve the company`s renewable energy goals.. . . .