Reducing your costs and carbon emissions can be a substantial challenge. However, with a virtual power purchase agreement (VPPA), you can secure years of low-cost renewable energy and create a more sustainable future. For any organization aiming to use a power purchase agreement (PPA) for business, a VPPA offers long-term price stability and supports renewable energy projects feeding into the grid.
In an era of record inflation, energy shortages and skyrocketing fossil fuel prices, companies across Central and Eastern Europe are seeking new ways to reduce costs. At the same time, many companies are setting decarbonization and net-zero as Environmental, Social & Governance (ESG) targets, driving the need for greater access to clean electricity.
An emerging solution is a virtual PPA for businesses, commonly known as a financial PPA. The purpose of this article is to explain how these agreements work and how VPPAs can help your company achieve its sustainability goals.
What is a virtual PPA?
A virtual PPA is a long-term electricity purchase contract (typically 10-25 years) between a renewable energy producer and a company (off-taker).
Unlike a physical PPA, a virtual PPA does not deliver electricity directly from the producer to the off-taker. It does not have to share the same power grid, and depending on the regulations and the energy market, it can even be in a different country.
Here is an example of a VPPA:
Enery is developing a virtual PPA for businesses that will produce renewable energy in Bulgaria for an off-taker in Romania. The agreement enables our customer in Romania to secure a significantly cleaner energy supply that would have otherwise been unavailable, thus supporting the company & sustainability goals.
In a virtual PPA, electricity is bought and sold at market prices and then reconciled at the agreed rate. Here’s a further example scenario:
● Your company signs a virtual PPA with us, Enery, at €70 per megawatt-hour (MWh).
● If we sell our green electricity into the market at €80/MWh and your business buys power at €80/MWh, we refund you €10/MWh in the settlement process.
● Similarly, if your market price falls below the PPA rate, your business pays Enery the difference, ensuring financial protection against market volatility.
Enery’s VPPAs for companies are certified renewable energy contracts. Each MWh of clean electricity comes with a guarantee of origin, where available, giving buyers full transparency and supporting their emission reduction goal.
What are the benefits of a virtual PPA?
A virtual PPA provides your business with access to clean energy at predictable costs without requiring upfront capital. Enery assumes responsibility for the development, construction, and operation of the project. This arrangement allows your organization to implement renewable energy efficiently and provides the following operational and strategic benefits:
1. Stable energy pricing: A fixed-price VPPA shields your business from market volatility and unexpected electricity cost fluctuations.
2. No infrastructure modifications required: Clean energy is sourced virtually, eliminating the need for changes to existing electrical systems.
3. Support for sustainability targets: Facilitate progress toward ESG commitments, net-zero objectives, and broader corporate sustainability goals.
4. Contribution to renewable energy development: Virtual PPAs fund new solar and wind projects, supporting grid expansion and the broader transition to sustainable energy.
Why is virtual PPA a smart choice for your company?
As a virtual PPA does not require you to share a power grid with the clean energy asset, your company can access renewable energy no matter where you are. VPPAs are also ideal for large organizations with multiple sites, including companies with several warehouses or factories, or restaurant chains spread across different regions. Instead of installing a renewable energy asset on each location or signing multiple physical PPAs, a virtual PPA aggregates the financial and environmental benefits into a single contract, providing protection against the fluctuating market.
Enery recently signed a virtual PPA with the iconic beer company Asahi Europe & International. This agreement will supply Romanian breweries with clean energy from a new 50 MW solar PV park. The agreement is a critical step in the company’s mission to make its 19 European breweries carbon-neutral by 2030. A green PPA also enhances your corporate image and shows your commitment to a healthier planet. With more customers, employees, and stakeholders seeking companies with strong environmental values, a PPA provides a solution that gives you an advantage in the competitive global market.
The benefits of partnering with a clean energy producer
Forming a long-term industry partnership with a renewable energy developer unlocks additional financial and environmental benefits. Does your company not have roof space for a solar PV system or is in a region with limited sunlight hours? A virtual PPA for businesses provides clean energy from a larger, more efficient energy project with higher production. Enery constructs projects in specific geographical locations. This approach minimizes the cost of each megawatt-hour delivered and ensures the PPA contract delivers value to the business while supporting long-term sustainability goals.
Our clean energy projects also support a diverse range of community and biodiversity initiatives. They ensure your PPA delivers more value to people and the environment while creating a better world for future generations as your company actively invests in green energy. By working with a trusted seller like Enery, your organization gains access to reliable electricity and following benefits:
♦ Lower long-term energy costs
♦ Reduced carbon footprint
♦ Stable pricing
♦ Stronger sustainability credentials
♦ Support for renewable energy expansion
Ready for a sustainable future? Talk to Enery’s PPA experts
Virtual PPA makes it simple and affordable to embrace sustainable electricity but only with the right industry partner.
Enery is one of the leading renewable energy developers in Central and Eastern Europe. We have a growing portfolio of zero-emission projects, including solar PV, wind, hydropower and battery storage.
Working together, we can create a customized agreement that meets your financialand sustainability goals while offering a reliable solution for sourcing clean electricity.
If you’d like to discover more about a virtual PPA, contact our team to learn how your organization can benefit.
♦ virtual PPA
♦ iconic beer company Asahi Europe & International
♦ community and biodiversity initiatives
♦ contact our team