Friday, 6 July 2012

Decc seeks evidence on faltering market for power purchase agreements


The Department of Energy and Climate Change (Decc) has asked for evidence from renewable energy developers on the availability of power purchase agreements (PPAs), and suggested intervention may be needed to stimulate the declining market for the agreements.

Developers seek PPAs when they are building wind farms and other projects so that they have a guarantee that the power they produce will find a market, but also so the buyer will manage the fluctuations in generation - often by aggregating with other power plants. But recently developers have complained that fewer PPAs are available, that the number of counterparties offering them has fallen, and where PPAs are available that the terms - which generally include a discount on the power price in return for assuming the risk - are less favourable.

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