PPA FAQs

A PPA, or Power Purchase Agreement, is a contract between an energy generator and purchaser for the sale of power.

A PPA sets out the trading terms between an electricity generator and business buyer. This contract explains:

• How much electricity the buyer wants to buy  
• How long they want to buy the power for, and at what price
• What site and technologies the agreement covers.

There are three main types of PPA:

• Utility PPAs involve GB electricity suppliers and generators, and typically last 2-3 years
• Corporate PPAs are agreements between electricity generators and commercial, industrial, or financial customers. These typically last 10-15 years
• Behind the Meter PPAs involve electricity generators and commercial, industrial, or financial customers. Customers need to be close to a new or existing energy site for these schemes to work – as they involve being physically connected to a new cable. Behind the Meter PPAs normally last 10-15 years.

Virtual PPAs allow buyers access to low-carbon electricity through a financial arrangement only; there is no physical supply point. VPPAs are a niche segment of Corporate PPAs.

PPAs usually involve two main technology types:

• Baseload renewables – including landfill gas, hydro and biomass
• Intermittent renewables – such as wind, wave and solar power.

Buyer preferences may vary depending on the business type and priorities.

At Infinis, we offer solar power and landfill gas options.

Corporate PPAs provide fixed energy prices for buyers and generators over 10-15 years. If you’re buying electricity in a volatile market, that can be a big advantage. It means you can predict outgoings over a much longer period.

A well-structured PPA is good for business and good for the environment. You can prove your sustainability credentials, by highlighting where your electricity comes from. This may also affect customer perception and sales in some industries.

PPAs also help to achieve net zero. Sometimes a PPA may be the only option to build new renewable energy projects.

Contracts for Difference (CFDs) is a UK government-backed scheme to support low-carbon electricity generation. Each year, the government holds an auction to buy a specified amount of electricity.

Electricity generators submit bids to develop renewable projects. This involves a rigorous application process and competition is usually high.

Successful bidders form a contract with the government-owned Low Carbon Contracts Company.

Infinis has several years’ experience of CFDs. Our team understands what’s involved and works with government partners to deliver projects.

Behind the meter is where generators supply electricity to a business on-site. If you’re close to a new or existing electricity source, we can physically put a wire in and supply local power to your business.

You don’t need to use the electricity network to get power around the grid. Importing power through your meter can be much more expensive than having a private wire. In fact, behind the meter schemes typically reduce your electricity bill by 20-30%.

Infinis has years of experience in supplying Behind the Meter connections. Our team is one of the key players in the market.

Each type of PPA is different:

• Utility PPAs agree a trading price based on the wholesale market, which changes all the time
• Corporate PPAs are agreed by negotiation
• Behind the Meter PPAs offer a share of the savings available to the consumer at that site.

A CPPA is worth exploring if:

• Your business spends more than £0.5m a year on electricity
• You want to source 100% renewable electricity and support the UK’s journey to net zero
• Long-term price is important to your team, and you want stable long-term energy costs
• You want to prove your commitment to tackling climate change and support.

It’s worth exploring four key areas when progressing a CPPA:

• Technologies – would your business prefer specific technologies, such as solar or landfill gas? Or do you want advice on what might be the easiest option(s) to manage?
• Experience – what experience do prospective partners have in successfully completing agreements? Can they provide case studies, testimonials or share information from existing partnerships?
• Capacity – what capacity can companies offer, and what is the scale of their development pipeline? Do they have the resources and staffing to manage your requirements?
• Brand fit – do potential partners naturally align with your brand values and personality? Or are there potential barriers to address before committing to any joint venture?

If you own a large area of land close to where you use energy, it’s worth exploring Behind the Meter potential. There may be scope for you to secure renewable electricity, at reduced cost.

Ideally, your land should be within 5km of a connection point, and not in an area with restricted planning conditions (such as an Area of Outstanding Natural Beauty).

If you’re a landowner and want to find out more, please browse our land leasing page for further details and contact information.