Virtual Power Purchase Agreement Pdf

VPAPs are flexible and can help companies aggregate their load into a single renewable energy project under a single AAE, regardless of where their individual facilities are located. The VPPA is a separate financial contract that does not directly affect an organization`s traditional electricity supply. The organization continues to purchase electricity from the distribution company, in addition to the VPPA for renewable energy. LevelTen Energy has developed its dynamic matching engine to solve this problem. The engine analyzes all data from the LevelTen Marketplace – a vast database of more than 1,600 renewable energy projects across North America – to identify the best projects (or portfolios) based on the needs of each buyer. Thanks to the power of data science, LevelTen Energy can discover a project that meets a company`s needs in terms of size, price, risk, timing, location and other factors, whether they work alone or with other buyers. In the case of a virtual AAE, the energy does not physically pass from the project to the buyer. It is simply a financial contract, which is why it is often referred to as a financial PPPA. In a VPPA, energy is sold on the wholesale electricity market in a defined billing location (nodes, trading platforms or charging area).

The buyer continues to receive his electricity from his utility at his supply rate. For more information on the differences between a physical PPA and a virtual PPP, see „4 questions to ask before choosing a contract to purchase physical or virtual energy.“ Another aspect that benefits the buyer and the larger market is additionality. This involves adding a new sustainable electricity source to the existing grid. As we always claim with PowerHub, the benefits of virtual walking are and must be harnessed by all. Aggregation is the basis of such an approach. It allows small buyers to partner with huge groups, obtain a purchasing power agreement and thus give life to a renewable energy project. However, the largest (and most common) promise of value for ACME is that ACME Co. may, because of the VPPA, benefit from credits for the supply of renewable energy to the grid. This is a way that companies can go to „100% renewable energy“ without ever providing renewable energy sources on the ground or directly sourced energy from renewable energy sources. It is important that, in this scenario, only the company that owns and „removes“ the renewable energy allowances can credit the CO2 reductions. Even if someone else does purchase the electricity generated from this special wind or solar facility, ACME Co.

can claim CO2 reduction by removing the CERs. It is important to note here that VPPa need market liquidity – where the project is allowed to sell its energy directly on the grid at the prevailing wholesale price. This is generally only possible in organised markets such as a regional transport organisation (RTO) or an independent network manager (ISO) acting as third-party operators independent of the transport network. Since the VPPA economy is based on the difference between the fluctuating market price and the VPPA price, it is important to have the transparency of an RTO/ISO market. In this way, a synthetic AAE serves as a financial hedge against the volatility of electricity prices.