PPA structures and parties involved

Do the country's regulators allow corporate owners to purchase (1) directly from a facility, or (2) from a choice of suppliers?

In accordance with Article 11 of the General Electricity Law, the use of the facilities and networks that incorporate the Public Electricity System is allowed under the conditions provided for in the aforementioned regulation or agreed between the interested parties and their holders, as long as the supervisory body approves it after prior validation by the regulatory authority.

Hence, corporate owners are allowed to purchase directly from a facility or a choice of suppliers, as long as it has been approved by the supervisory body and has effectively gone through a prior validation from the regulatory authority.

Last modified 9 Feb 2021

In Australia, both financial and sleeved PPAs are able to be concluded directly between energy producers (vendors) and buyers (offtakers). Examples of such PPAs are those concluded by BlueScope Steel and the Commonwealth Bank of Australia. Corporate entities can alternatively seek out retail PPA arrangements whereby organisations purchase power from an intermediate supplier (retailer), who then contracts directly with a vendor to facilitate the supply of electricity. Retail PPAs have been secured in recent years by the University of Newcastle and the Melbourne Renewable Energy Group among others.

There is presently a relatively even spread between corporates seeking to conclude wholesale (i.e. financial or sleeved) PPAs and retail PPAs or other PPA arrangements (such as ‘behind the meter’ setups).

Typically, retail PPAs are preferred by small-scale buyers with less commercial expertise as the PPA itself is able to be concluded between the retailer and vendor without the buyer’s direct involvement.

Last modified 16 Dec 2020

Pursuant to article 2 of the Electricity and Water Law No. 1 of 1996 (“Electricity Law”) in the Kingdom of Bahrain (“Bahrain”), with the exception of personal use, no natural or legal person or any entity not affiliated with the Ministry of Water and Electricity may produce or distribute electricity except with a written license issued by the Minister of Water and Electricity, in such cases and under the conditions issued by a decision of the Council of Ministers. [1]

[1] Electricity and Water Law No. 1 of 1996

Last modified 16 Dec 2020

Corporations are allowed to purchase electricity directly from a facility, subject to certain technical and regulatory conditions. In addition, corporations are free to purchase electricity from the supplier of their choice. All types of Corporate PPAs are allowed in Belgium: direct, sleeved and synthetic.

Last modified 25 Feb 2021

Botswana does not allow corporate owners to purchase directly from a facility or a choice of suppliers.

Last modified 9 Feb 2021

According to Brazilian regulation there are two power market structures: (i) Regulated Market; and (ii) Free Market. The consumer which are included in the Regulated Market can only purchase power from the local distribution company, which are concessionaries of the distribution services and operate in a monopolistic structure within the applicable geographical areas.

As for the consumers allowed to be part of the Free Market, they can buy their power from other market agents, including directly from generation facilities and energy brokers. Accordingly, corporate PPAs in Brazil are executed within the Free Market.

Currently, for a consumer to enter the Free Market it is required to have a charge of at least 2,000 kW.

Last modified 16 Dec 2020

Regulators allow both types of purchases.

Last modified 16 Dec 2020

There are no restrictions for long-term CPPAs executed between participants of the Wholesale Energy Market (namely generators and retailing companies). However, there are restrictions for a generator to sell CPPA to large scale users, as only a retailing company can enter into a CPPA with a large-scale user.

Last modified 16 Dec 2020

The contract is between the customer and any electricity producer. The law does not restrict the choice of producer.

Both direct and sleeve PPAs and synthetic PPAs are allowed. Direct PPAs have evolved as a way for utilities to contract directly with generators for electricity produced from one or more specific facilities.

Last modified 26 Jul 2021

Corporations can directly purchase electric power from producers or suppliers of their own choice that are involved in the generation, off-grid transmission and distribution of power. However, as the area is not regulated in a comprehensive manner, implementation of off-grid power distribution in the sense of a cPPA is yet to be practical.

Supply of electric power through the national grid is reserved to the state-owned enterprise, i.e. the Ethiopian Electric Power (the offtaker) which in turn will transmit the generated electricity to another state-owned enterprise, the Ethiopian Electric Utility that will ultimately supply it to end customers. These state-owned enterprises are granted exclusive rights for the transmission and distribution of electricity through the national grid.

Last modified 18 Feb 2021

The Finnish regulator allows both direct and sleeved PPAs as well as financial PPAs. The fact that the parties (both producer and offtaker) may be located in different Nordic price areas or in different Nordic countries does not restrict them from entering into PPAs (including physical PPAs).

Last modified 16 Dec 2020

Yes. Direct purchases from a renewable energy installation operator and purchases from a choice of suppliers are both generally possible.

Last modified 16 Dec 2020

The Italian regulator allows both direct and sleeved corporate PPAs, although the sleeved structure is the most commonly adopted.

Last modified 16 Dec 2020

The legal and regulatory framework in Kenya does not expressly provide for corporate PPAs, nor does it directly provide for any corporate PPA structure. Parties who enter PPAs, therefore, tend to do so on an ad-hoc basis, structuring the transaction in accordance with the commercial needs of the parties. 

The Energy Act does provide some comfort around the propriety of corporate PPAs in creating the concept of an ‘eligible consumer’. 

An eligible consumer is a consumer that is permitted to choose any licensee to be a supplier and with whom the consumer may contract for the purchase of electrical energy for the consumer’s own use, in accordance with regulations made under the Act. There are presently no regulations which speak to this issue. 

A consumer is any person supplied or entitled to be supplied with electrical energy or petroleum.

Last modified 18 Feb 2021

Through the Self-Supply scheme, corporate owners may purchase directly from a facility. For new projects, after the reform, corporate owners may purchase the electricity directly from a generator, if the state-owned transmission system (“National Transmission System”) is not used (distributed generation or local generation). If the National Transmission System is to be used: (i) the electricity would need to be purchased from a supplier, or (ii) consumers with a minimum average yearly consumption is 1 MW, may become registered with the CRE as qualified consumers and may enter into a PPA with a generator.  

Last modified 16 Dec 2020

Corporate owners can purchase directly from a renewable energy electricity production installation. 

Last modified 10 Feb 2021

Legally speaking it is an open market, but in practice, because the national utility company manages the national grid, the approach has been that the national utility company tend to be the only off-taker requiring the regulatory authority to approve any arrangement that does not involve EDM as the off-taker. 

While regulators do not restrict corporate owners to purchase from a choice of suppliers as such, in practice, corporate owners are limited in terms of options, as EDM supplies electricity on a de facto monopoly basis.

Last modified 1 Feb 2021

All types of Corporate PPAs are allowed in the Netherlands: direct, sleeved and synthetic.

Last modified 16 Dec 2020

No text yet.

Last modified 16 Dec 2020

Corporate owners can directly purchase energy from suppliers in accordance with article 5 of the Free Electricity Users Regulation approved by Supreme Decree No. 022-2009-EM.

Last modified 16 Dec 2020

Yes, corporate owners can purchase directly from a facility. While regulators notionally allow corporates to purchase power from a choice of suppliers, in reality the choice of suppliers is often limited (largely, in many instances, to local municipalities and/or Eskom, for example).

Last modified 16 Dec 2020

Yes, according to the current regulations corporate owners may purchase directly from a facility / producer (on site) or from a supplier (off site).

Last modified 16 Dec 2020

Electricity trade in Sweden is deregulated and customers can decide where they buy electricity from. Electricity distribution however takes place via national or regional electricity network monopolies and network operations are regulated by the Swedish Energy Markets Inspectorate (Ei).

There is no restriction from Ei for the type of Corporate PPAs used and physical and financial PPAs are common in the market.

Last modified 16 Dec 2020

No. Corporate owners may not outrightly purchase directly from a facility. Uganda operates a single-off-taker electricity supply model where all electricity is purchased by the Uganda Electricity Transmission Company Limited (UETCL). The UETCL, in turn, sells the power to licensed supply and distribution companies. The corporate owner may then purchase power from the licensed supply & distribution company. 

For example, the key distributor; Umeme presently holds a 20 years (up to March 2025) concession to operate assets formerly owned by the Uganda Electricity Distribution Company Limited and the right to supply and distribute electricity within and indicated distribution network in  Uganda. Ordinarily, a generator/facility will not be permitted to sale directly to corporate owners in areas covered by a pre-existing supply and distribution license (in competition with Umeme).

Last modified 9 Feb 2021

Most of the Middle East’s markets continue to have a state owned utility company at the core of the electricity market.  Rarely can purchasers contract with a third party for electricity supply, hence the development of the leasing / hire-purchase model in net metering schemes. 

Last modified 21 Jan 2021

Ofgem allows both direct and sleeved PPAs as well as synthetic PPAs. Direct PPAs have evolved as a way for corporates to contract directly with power generators for the power produced from one or more specific facilities. A variety of suppliers are active in the GB market, and consumers are free to change supplier with minimal disruption. Under the current regulatory structure, end consumers can only buy electricity from a single supplier. Nevertheless, Ofgem has recently performed a consultation on the option of allowing a single consumer to have multiple suppliers.

Last modified 16 Dec 2020

The options available to a corporate buyer vary based on the location of the corporate buyer’s facility and the project and the transaction type. Independent System Operators and Regional Transmission Organizations operate regional wholesale markets in approximately two-thirds of the US. Independent power producers in these regions own and operate generation projects and sell power via the established market. Not all states take the same approach and various aspects of the wholesale or retail power market may be deregulated and competitive or regulated. 

Last modified 24 Mar 2021

Angola

Angola

To what extent are corporate PPAs presently deployed and what sort of structure do they take?

Corporate PPAs remain uncommon in Angola. 

Article 48 of the Electricity General Law provides that outside the scope of the public electric system, the conditions of sale of electric energy will be established by the parties.

Article 15 of the Executive Decree No. 122/19 of May 24 (electric energy sales tariffs) provides special arrangements for the sale of electricity by means of special or bilateral contracts between producers and distributors and those with final customers, under the terms set out in the Tariff Regulations (Presidential Decree No. 4/11 of January 6) shall be authorized by an order of the Minister of Energy and Waters, after hearing the regulatory authority.

All the contracts with National Transportation Network ("RNT" as a sole buyer must comply with certain requirements specified in Article 11 of the Presidential Decree No. 4/11 of January 6 as amended by Article 11 of the Presidential Decree 178/20 of June 25, in order to their prices are allocated to tariffs.

Do the country's regulators allow corporate owners to purchase (1) directly from a facility, or (2) from a choice of suppliers?

In accordance with Article 11 of the General Electricity Law, the use of the facilities and networks that incorporate the Public Electricity System is allowed under the conditions provided for in the aforementioned regulation or agreed between the interested parties and their holders, as long as the supervisory body approves it after prior validation by the regulatory authority.

Hence, corporate owners are allowed to purchase directly from a facility or a choice of suppliers, as long as it has been approved by the supervisory body and has effectively gone through a prior validation from the regulatory authority.

Other than the generator and the off-taker, are any third parties commonly party to the PPA structure (e.g. a utility or other market agent)?

In addition to the electrical energy provided by the Company ENDE E.P (National Electricity Distribution Company) that comes from hydraulic dams and private generators, so far, there are no other third parties as a common party to the cPPA structure.

Is a generator permitted to sell electricity directly to an end user? If so, do they require a licence or other form of authorization?

As previously stated, Article 48 of the Electricity General Law provides that outside the scope of the public electric system, the conditions of sale of electric energy will be established by the parties.

Last modified 9 Feb 2021

Angola

Angola

What are some of the technical, political, financial or regulatory challenges to corporations adopting green energy in the short/medium term in your country and how have these challenges been overcome (or how can they be overcome)?

More incentives and benefits need to be created for companies that want to implement green energy systems. Facilitating the process of importing and accessing currencies to pay for equipment to implement the projects related to renewable energy is necessary. Governments should create incentives for companies that are implemented across the country, thereby creating employment and facilitating greater acceptance of new technologies in rural areas.

Last modified 9 Feb 2021

Angola

Angola

Are there any anticipated regulatory changes which will alter the regulatory landscape for corporate green energy and corporate PPAs?

International development partners are providing technical support to the Angolan government to establish a regulatory framework which includes negotiating power purchase agreements with independent power producers (IPPs) and design of a feed-in-tariff scheme for renewables.

Last modified 9 Feb 2021

Angola

Angola

What is the corporate appetite for green energy, including any political or financial incentives available to corporates to adopt green energy?

Even though national and international companies have been showing interest to develop green energy structures in Angola, this is still something that has to be well studied and thought through it. However, there are already small dimensions of solar energy structures being developed, for example, but only for particular purposes.

What are the key local advantages of the corporate PPA model which can benefit our clients?

The key local advantage of the corporate PPA model in Angola is energy security and easier access to financing having the corporate PPA as collateral.

What subsidies are applicable to the generation and sale of renewable energy?

This information has not been made public.

Does your country implement a national support scheme with tradable green certificates (such as guarantees of origins)?

Not yet, as green energy has not yet been implemented.

Last modified 9 Feb 2021

Angola

Angola

To the extent corporate PPAs are deployed, how are prices, terms and risks affected?

Do prices tend to be floating or fixed?

According to Article 26 of the Presidential Decree 178/20 of June 25, the tariff structure is applied by the RNT concessionaire and by the distribution companies to users connected to their networks. Along these lines, this same diploma, on its article 27, establishes that the tariff structure reflects the costs to which users give rise, according to the characteristics of consumption and the level of tension to which they are connected, regardless of their social or legal character and the final destination give to the energy consumed. 

Hence, the prices are fixed considering the elements above mentioned.

What term is typically agreed for the PPAs?

There is not a fixed-term for cPPAs it all depends on the activity to be exercised. However, it is important to mention that the tariff regime is, in general terms, in force in a four-year tariff regime. Alongside with that, the tariff period is defined by a specific diploma by the Sector Regulatory Entity, which must be multiannual, as established on Article 28-A of the Presidential Decree 178/20 of June 25.

Are the PPAs take-or-pay or limited volume?

Not applicable.

Are there any other typical risks?

Not applicable.

To the extent corporate PPAs are deployed, in whose favour will the risks typically be balanced?

Volume risk

The risk is born by those who not comply with rule applicable to the specific situation.

Change in law

Usually, when changing legislation, users and distributors are given a period to prepare and adapt to this mentioned change of legislation. Hence, when there is a change in law non complied with, the risk is born by those who have not complied with the rule in place.

Increase / reduction of benefits

Again, similar to the change in law, the risk is born by those who not comply with rule applicable to the specific situation.

Market liberalization (if applicable)

Not applicable.

Credit risk

The risk is born by those who not comply with rule applicable to the specific situation.

Imbalance power risk

The risk is born by those who not comply with rule applicable to the specific situation.

Production profile risk

The risk is born by those who not comply with rule applicable to the specific situation.

Last modified 9 Feb 2021

Angola

Angola

Does your country operate a balancing responsibility scheme?

Not applicable.

If your country operates a balancing responsibility scheme, who is the balancing authority and do the generator and offtaker typically undertake balancing themselves?

Not applicable. 

Last modified 9 Feb 2021

Angola

Angola

What significant transactions/deals have taken place in the last 12-18 months?

Laúca Hydroelectric Power Plant

According to the Government, Laúca Hydroelectric Power Plant (“AH Laúca”) is the largest work in the country today. The Project was commissioned by the Angolan Executive, represented by the Ministry of Energy and Water, and is carried out by ODEBRECHT. COBA and LA MAYER carry out the supervision of the implementation of the project. When AH Laúca is 100% operational, it will produce more than twice as much energy as the other two dams already operating on the Kwanza River. This energy potential will serve 8 million people. AH Laúca will produce 8,643 GWh (gigawatts) of electricity, representing an installed capacity of 2,070 MW (megawatts).

The realization of the project demands great infrastructure support. Because of this, AH Laúca is today a city that is composed by: Leisure area; Sports area; Accommodations; Kitchen and Cafeterias and Medical Center.

AH Laúca is a pole of job and income generation. The project is also committed to providing opportunities for national talent. Today, the enterprise has 8,458 Members. Of these, 8,035 are national, which represents 95% of the entire productive force involved in the execution of the work. The remaining 423 are expatriates, a number that represents 5% of total members.

Through the Acreditar Program, the project offers basic and specific training to AH Laúca Members and also to the residents of the communities surrounding the construction site.

AH Laúca is 86% ahead of Civil Works, 72% ahead of Electromechanical Assembly and 14% in the Energy Transport System. Always overcoming challenges and fulfilling all the goals set with safety, quality and productivity.

2nd Hydroelectric Power Plant of Cambambe and Dam Alignment

With the conclusion of the Cambambe 2nd Power Station and the Dam Raising, it was possible to obtain an additional power of 780MW. This power is helping to reduce the energy supply deficit in the Provinces of Luanda, Kwanza Sul, Malanje, Uige, Kwanza Norte and Bengo.

It will also allow the interconnection of the North-Central Systems with the Benguela Province link, thus reducing production costs and the consumption of diesel for energy production.

More than 10,000 construction posts have been created as part of the temporary work in the rehabilitation, modernization and extension of the hydroelectric complex. The construction owner was GAMEK (Gabinete de Aproveitamento do Médio Kwanza) and the contractor was ODEBRECTH.

Solar village program

The main objective of the Solar Village Programme is electrification, through the installation of autonomous solar photovoltaic systems (isolated) in infrastructures Social, including: Schools; Medical Posts; Police Posts; Administrative Buildings; and, Social Jangos, including Public Lighting Posts.

In the 1st phase of the Programme, awarded to the company Elektra Electricidade e Águas, Lda, 11 localities were selected from 4 Provinces in the country: Bié, Kuando Kubango, Malange and Moxico. This phase has been completed since 2011, with a total of 156,660 Wp of 42 systems and 70 public lighting posts implemented.

In some cases, a system provides electricity to more than one infrastructure. So far, 50 infrastructures have benefited from the electricity supply, namely: 15 schools, 18 medical posts, 1 maternity ward, 1 police station, 1 police station, 9 administrative residences, 1 nurse's residence, 3 administrations.

In the 2nd phase of the Solar Village Programme, four companies were selected for the installation of a total of 75 systems and 160 streetlights.

As part of the 3rd phase of the Solar Village Programme, the project has already started after the Auto de Consignation signed with the Company LTP Energias S.A. The project will benefit the provinces of Kwanza Sul, Cuando Cubango and Lunda Sul, whose aim is to supply electricity to the communities with Solar Photovoltaic Systems of Auto-consumption Kits and Public Photovoltaic Lighting.

It is part of the energy and water sector action plan 2018-2002, to continue the Solar Village Programme and to ensure adequate maintenance of its infrastructure and test a new concept of a 100% solar mini network, based on batteries, to electrify the most isolated municipality headquarters, avoiding fuel logistics.

What transactions/deals are anticipated to come to market in the next 12-18 months?

See Past transactions

Last modified 9 Feb 2021