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PPA CONTRACTS
A power purchase agreement (PPA) is a long-term contract between power buyers (offtakers) and energy suppliers. PPAs define the price an energy supplier will receive for each megawatt-hour (MWh) of energy generated from a renewable energy asset. They also set out the amount of electricity to be supplied, the length of the agreement, and details such as transmission issues and insurance.
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ON SITE
An on-site PPA involves a direct physical supply of electricity without using the public electricity grid. In this case, the energy production facility is located behind the consumer's metering point, i.e. for example on the company's own premises, or there is a direct line between both parties. This also means that energy production and consumption are within the same balancing pool. With an on-site PPA, grid costs and energy taxes can be reduced. The size of the plant is usually tailored to the consumer's consumption profile. Since the electricity generated in an on-site PPA directly reduces a company's consumption, all on-site PPAs are also corporate PPAs.
MICROGRID
Due to the intermittent nature of renewable energy sources (solar panels need sunlight to create solar energy and wind turbines need wind to spin), some organizations entering into a PPA may also need energy storage systems to prepare for and manage power shortages.