Yes, absolutely. Virtual contracts to purchase electricity have changed the space for clean energy. As I said above, they opened doors for small businesses who thought that only the World`s Google, Amazon and Microsoft had the muscle to meet the CO2 offset challenge. What is there for the buyer of the business? I have it, they need something to fuel their final score. It is the notion of “hedging” that comes into play. Regardless of the prices on the open market, the buyer always benefits from a fixed tax rate. It is therefore protected from price fluctuations. Another aspect that benefits the buyer and the larger market is additionality. This involves adding a new sustainable electricity source to the existing grid.
A virtual contract to purchase electricity is then a kind of “contract for differences”. It is signed for the underlying value of energy, not for the physical flow of power. The sustainability of our planet and our energy sources has accelerated through the use of virtual electricity supply contracts. 2018 was a record year in the United States for renewable energy contracts. 4.81 GW of virtual agreements were signed in the first 10 months. Now, project developers are cutting out a project and selling the parts to several buyers. It is called aggregation — and it has the potential to transform the industry. When aggregating, a developer doesn`t need to find a utility or a large company first.
Many buyers can buy together most of the energy that the project will produce, so that the developer can get financing. By cutting the project, buyers who do not need a very large amount of energy can now participate in PPAs. For more information on aggregation, see “What is energy aggregation? – a primer. In this way, a synthetic AAE serves as a financial hedge against volatile electricity prices. As a general rule, the buyer receives the project`s renewable attributes or renewable energy certificates (RETs). In the absence of physical electricity supply, VPPA is an excellent option for large electricity consumers with a fragmented/distributed electrical charge to support the development of new renewable energy sources. Virtual aerating contracts (VPPAs) are rapidly becoming a way for companies to achieve their renewable energy goals. However, it can be difficult for your clients to explore the benefits of VPAPs if they do not understand what these types of contracts are and the basics of how they work.