Germany lags behind in worldwide boom of power purchase agreements (PPA) – report
Clean Energy Wire
Germany lags behind many other countries in the global trend to finance renewable power installations via power purchase agreements (PPAs), according to a paper by consultancy Aurora Energy Research. “Germany has the potential to cover at least 13 percent of industrial power through PPAs, which corresponds to a market volume of 2 billion euros,” Aurora says, adding that PPAs offer long term price security, “boost an offtakers green image”, and enable the economical operation of subsidy-free renewable energy installations. “Despite the benefits and enormous potential of PPAS, the market for German renewables PPAs is quite small in comparison to Scandinavia, the USA, Spain, and the UK,” Aurora adds.
A PPA is a mostly long-term contract between a power generator and an electricity consumer specifying the terms for the sale of electricity. In Germany, PPAs are being used to finance new renewable installations without support payments. Energy company BayWa Re said in May that it would build Germany’s first large-scale solar power plant to be operated outside the system of state-mandated incentives, based on a long-term PPA with industrial partners.