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03 Sep 2019, 13:34
Freja Eriksen

German industry keenly interested in green PPAs – dena study

Clean Energy Wire

German industry and energy companies see corporate green power purchase agreements (PPA) as an important financing instrument for renewable energy in the future, shows a survey among market actors by the German Energy Agency (dena). Fifty-five percent of the 128 surveyed market representatives rate PPAs as "important" and 33 percent as "very important." Above all, they see potential for this type of direct electricity supply trading in solar and wind power. In Germany, PPAs have mainly been viewed as a way to continue the financing of renewable installations which run out of support from the Renewable Energy Act, but dena's survey shows that 72 percent of energy market players already see possibilities to also finance new installations through the purchase agreements. Although both industrial power consumers and power producers see potential in PPAs, they point to obstacles in the existing legal framework and insecurity about future legal framework as well as lack of experience.

A PPA is a mostly long-term contract between a power generator and an electricity consumer specifying the terms for the sale of electricity. A recent paper by consultancy Aurora Energy Research, however, showed that Germany is lagging behind many other countries in this area. “Germany has the potential to cover at least 13 percent of industrial power through PPAs,” which offer long-term price security, “boost an off-taker’s green image,” and enable the economical operation of subsidy-free renewable energy installations, Aurora has said.

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