Pricing and valuation of Power Purchase Agreements (PPAs)

Increasing electricity prices and decreasing electricity production costs for renewable assets lead to a great interest in Power Purchase Agreements (PPAs). This is valid for Germany and across Europe, where PPAs also play an important role for the financing of new onshore and offshore wind energy projects as well as for photovoltaics. enervis has been involved in these PPA markets for a long time.

For the economic evaluation of a PPA, a comprehensive understanding of the wholesale price development as a benchmark as well as the project specifics of the renewable assets behind the PPA is necessary. Our PPA-related advisory services include procurement, pricing, and contractual assessment as well as negotiation of corporate PPAs and utility PPAs in both physical and financial form. The starting point for our evaluation of a PPA are forward market quotations and electricity market modelling with enervis’ European electricity market model. In addition to the analysis of the future development of electricity prices and capture prices, many energy-market-related points are relevant in the context of a PPA. enervis supports the structuring of these points for the PPA based on many years of market experience.