cPPA contracts – an opportunity for cheap energy from renewable energy sources
The cPPA (Corporate Power Purchase Agreements) contracts entered the Polish power industry's salons just a few years ago. The first ones willing to take advantage of the contracts were market leaders who created the trend of co-responsibility for the environment, as well as entrepreneurs for whom it was important to guarantee a fixed purchase price for at least a few consecutive years. These contracts are usually concluded for a period of 5-10 years, which results from the requirements set by RES producers (by concluding such contracts, RES producers allow financing of the sources being built, mainly photovoltaic and wind farms).
Energy prices for 2023. About the risk of purchasing energy at SPOT market prices
How is it with these energy prices? Buy energy for 2023 now or wait until autumn to buy energy with the hope of lowering prices? Make a purchase at a predetermined price or choose a pricing mechanism based on stock indices? Should you decide to buy energy based on long-term cPPA contracts or decide to invest in your own energy generation sources?
The answer to all questions is: it depends. On a macro scale, it depends on geopolitics. Prices of coal, gas, emission allowances. The situation on European markets and the increasing uncertainty of raw material supplies. EU or local political decisions accelerating or inhibiting the development of the energy sector. On a micro scale, it depends on the situation of a specific company. Its business profile, current and expected financial situation, market awareness as well as the risk appetite of its management.
Purchase of energy from renewable sources. How to protect the company against increases?
The purchase of energy from renewable sources has gained in importance over the last year, because the so far leading ecological emphasis has been supported by a very strong partner - the financial aspect. Over the last year, the purchase of "green" energy (often based on long-term cPPA contracts) has become strongly competitive with the purchase of energy from the power exchange, the prices of which have experienced a threefold increase y / y (one of the main culprits of the current increases is the situation on the coal market). The energy prices offered to companies in the last days for 2023 exceeded the level of PLN 1,250-1400 / MWh (rates vary depending on the characteristics of the recipients; let us remind you that in 2021 entrepreneurs were buying energy on average at PLN 300-400 / MWh).