What is a Power Purchase Agreement (PPA)?
A PPA, or Power Purchase Agreement, is a contract between an energy generator and purchaser for the sale of power.
How does a PPA work?
A PPA sets out the trading terms between an electricity generator and business buyer. This contract explains:
What types of PPA are there?
There are three main types of PPA:
What is a virtual PPA (VPPA)?
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.
What technologies does a PPA cover?
PPAs usually involve two main technology types:
Buyer preferences may vary depending on the business type and priorities.
At Infinis, we offer solar power and landfill gas options.
What are the benefits of Corporate PPAs (CPPAs)?
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.
What are Contracts for Difference (CfDs)?
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.
What does behind the meter mean?
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.
How are PPA prices calculated?
Each type of PPA is different:
How can you work out if a CPPA is right for your business?
A CPPA is worth exploring if:
What factors should you consider when choosing a Corporate PPA partner?
It’s worth exploring four key areas when progressing a CPPA:
How can you tell if Behind the Meter might be viable for your business?
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.