PPA structures and parties involved

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.

Last modified 9 Feb 2021

Aside from retail PPAs, agreements involving other third parties are possible, although such PPA structures remain novel at present and less commonly used. In third party PPAs an insurer may be engaged to hedge electricity by taking on the risk associated with the spot price and the volume generated by the vendor, and then entering into a fixed-volume/fixed-price derivative arrangement with the corporate offtaker.

Last modified 16 Dec 2020

Information not publicly available.

Last modified 16 Dec 2020

The amount of parties involved depends on the type of corporate PPA chosen. When it comes to on-site PPAs, for example, besides the generator and the consumer, there will usually also be an electricity supplier/utility involved, purchasing the surplus green electricity not consumed locally and selling it onwards via the grid, as well as supplying any residual electricity required by the offtaker (and in that case also being responsible for the balancing of the grid connection of the offtaker).

When it comes to physical PPAs, besides the producer and the consumer, an electricity supplier/utility will usually be involved, in particular for purposes of grid balancing and to supply any residual electricity required by the offtaker. Where the seller of the green electricity does not intend to obtain the required supply permit(s) itself, the utility may take a greater role and actually act as an intermediary in the purchasing and selling of the electricity (sleeved PPA).

Synthetic PPAs, on the other hand, function with a derivative contract structure where the offtaker and the generator agree a defined 'strike price' for power generated by a renewable energy facility. Each party will then enter into separate agreements with their electricity supplier/utility to sell/acquire (as applicable) electricity at the spot price.

Last modified 25 Feb 2021

There are no other third parties commonly party to the PPA structure.

Last modified 9 Feb 2021

Most Corporate PPAs are entered between generators and offtakers. However, there is a new trend in the market that involves an energy broker taking part in the agreement to enable better risk allocation. The energy broker may undertake risks that the other parties are not willing to take (such as submarket and production/consumption profiles risks), since its diversified power portfolio allows it to better allocate and mitigate them.

Note that other agreements are required to enable the physical delivery of the power to the offtaker, such as agreements for the use of the distribution/transmission system, entered with the relevant distribution/transmission utility company.

Last modified 16 Dec 2020

No other than the generator and the off-taker, and third parties do not form part of the PPA’s structure.

Last modified 16 Dec 2020

Not normally; sometimes guarantors are involved.

Last modified 16 Dec 2020

Agreements involving third parties are possible, the law does not restrict it in any way. In such PPAs, the third party usually acts as an intermediary between the manufacturer and the buyer. Renewable energy produced by the generation site is not delivered directly to the point of demand or consumption of the business, but via a third party (usually the energy company) to the existing energy grid.

Last modified 26 Jul 2021

No, parties to the PPA are the generator or the IPP and the offtaker.

Last modified 18 Feb 2021

Although a standard practice has yet to be developed in Finland, agreements involving third parties are possible. In such PPAs, the third party typically acts as an intermediary between the producer and the buyer. For example, transmitted electricity may need to be converted into a form determined by the offtaker. In addition, a third party may be responsible for balancing for either the producer or the offtaker (or both).

Last modified 16 Dec 2020

To date, there have been few corporate PPAs deployed in Germany and there is little publicly available information on the specifics of relevant transactions. As a result, it is difficult to comment on common PPA structures and it is unclear, for example, how frequently intermediate marketing companies and/or third parties providing balancing services become part of PPA structures. Still, it seems not to be uncommon that utilities or trading companies become intermediaries to renewable energy installation operators and corporate offtakers.

Last modified 16 Dec 2020

Yes. Utilities entities are generally party to the PPA structure.

Last modified 16 Dec 2020

In a PPA with KPLC, the parties to the agreement are the power-generating company (KenGen or an IPP) and KPLC itself as the offtaker. 

EPRA is required to approve the PPAs but is not a party to the agreement itself.  

The Kenyan Government is not party to these PPAs and does not give any sovereign guarantee of such PPAs, but in some cases will provide a Letter of Support to the lenders and sponsors to cover the perceived political risks in the project.  However, the scope of these Letters of Support has been reduced over time and is now subject to strict government guidelines.

Last modified 18 Feb 2021

Yes, marketing companies or suppliers are necessary if the electricity is to be wheeled through the National Transmission System. If there is no need to use the National Transmission System (distributed generation or local generation) the use of third parties may not necessary.

Last modified 16 Dec 2020

As previously indicated in point 2 above, no direct wire projects can be implemented pursuant to Law No. 13-09. The operators of renewable energy production installations will need therefore to access the national medium-voltage, high-voltage and very-high-voltage grids in order to commercialize the electricity produced from renewable energy sources and this subject to the available technical capacity of the grid. 

In practice, two agreements are entered into between the generator and the national electricity transport grid operator in order to access the national grid:

  • a grid connection agreement pursuant to which the operator of renewable energy production installations connects its facility to the national grid;
  • a network access agreement pursuant to which the operator is granted the right to inject electricity into the grid in compliance with certain technical and financial conditions.

Last modified 10 Feb 2021

In Mozambique, cPPAs are commonly concluded between the generator and the off-taker with no involvement of third parties.

Last modified 1 Feb 2021

Due to the ‘group prohibition’ every PPA, except for the on-site PPA, will require a transport arrangement with a grid operator. Often an energy utility company is involved to smooth out fluctuations in the electricity production and supply.

Last modified 16 Dec 2020

No text yet.

Last modified 16 Dec 2020

Generators and offtakers are commonly in the PPA structure.

Last modified 16 Dec 2020

As outlined in Structures, the parties to a CPPA commonly tend to be the IPP and the corporate. Third party involvement is perhaps less common in this market other than in cases of wheeling which, as above, often requires the involvement of the grid operator.

Last modified 16 Dec 2020

Other than generator and offtaker, it is usually the presence of a market representation agent, that can be a supplier. In physical-offsite PPAs, the generator sells the energy to end users through a supplier, that provides both the energy from the facility and the missing energy from its generation portfolio.

Last modified 16 Dec 2020

No, the usual parties to a PPA will only be the generator and the offtaker.

In Sweden electricity producers have three main options as to what to do with their generated electricity: (i) it can be sold to electricity traders or users, (ii) it can be sold via the electricity market Nordpool or (iii) they can use it for their own purposes.

The electricity being produced will need to be transferred to the grid and a PPA structure will include a grid connection agreement and an electricity transmission agreement. Local or regional operators own and run the grid and are responsible for transporting the electricity from production sites to users – the Swedish grid is divided nationally, regionally and locally. The 400 kV national grid is owned and operated by Svenska Kraftnät and three grid companies, E.ON Distribution, Vattenfall Distribution and Ellevio own the majority of the Swedish 10-130 kVs regional grids with other local operators completing the picture.

Last modified 16 Dec 2020

This is uncommon. The PPA is signed between the generator and off-taker. However, the PPA and particularly the tariff must be approved by the sector regulator (The Electricity Regulatory Authority/ERA).

Last modified 9 Feb 2021

Under the net metering schemes seen in the region, a standardised electricity connection agreement is entered into between the purchaser and the utility.  Under the terms of that connection agreement, the utility’s meters record the purchasers usage and generation.  In the utility’s billing cycle, the two figures are netted-off.  The lessor / supplier of the power generation plant has a bilateral contract with the purchaser.

Last modified 21 Jan 2021

Agreements involving third parties are possible. In such PPAs, the third party typically acts as an intermediary between the generator and the buyer (also referred to as an offtaker). The renewable power produced by the generation site is not directly delivered to the corporate's demand or consumption location, but through the third party (typically a utility company) on the existing power grid. Since renewable generators (especially wind and solar) cannot guarantee output as it fluctuates with weather conditions, corporates require a "sleeving" arrangement with an energy utility company whereby the supply from the renewable generator is topped up with other energy. This structure provides a stable energy supply and is, therefore, commonly used in GB.

Last modified 16 Dec 2020

No. Independent power producers sell to traditional utilities, municipal utilities or regional cooperatives at wholesale who then engage in separate retail transactions with customers. IPPs in some markets can also engage in wholesale transactions directly to corporate buyers or to aggregators representing a group of retail customers.     

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