PPA Sanity Checks

You are a potential supplier or buyer of a PPA (Power Purchase Agreement) and receive different price quotes for different durations, volume arrangements and marketing volumes? You might ask yourself the following questions, for example:

• How I compare PPA prices? What are the components that make up these prices?
• What are normal market risk premiums per technology? What are the average portfolio management costs?
• Are the risks in the contract offer fairly distributed and priced?
• What influence should the contract term, volume fixing or the plant location have on the PPA price?
• Which price and volume regulation is most advantageous for me?

We will assist you in clarifying these questions. And, together with you, we will thoroughly check the price quotes. This will give you an overview of the advantages and disadvantages of the various contract structures. Plus: The data used will enable you to make a more objective and factual assessment.

On request, we can also prepare individual sales analyses and/or support you in preparing your negotiation strategy or selecting your contractual partner.

Your Benefits

• You will gain a deeper understanding of PPA price components and their influencing variables.
• The price understanding you gain will help you to negotiate at least at eye level.
• You will be able to classify the PPA prices offered to you.
• Your risk of accepting a sub-optimal offer is minimised. At the same time, you increase your chances of an improved PPA risk-return profile.

If you also need support in optimising the timing of the PPA conclusion, an in-house workshop "Futures market analysis for the PPA log-in strategy" could be of interest to you.

A typical project sequence can look like this

You would like to conclude a PPA and receive several offers at different prices. However, the offers are difficult to compare when it comes to prices, as they vary greatly in terms of contract duration, price and volume arrangements and other risk-related elements.

You decide to include us as a second opinion and send us the offers. We check these with the help of data-based analyses and send them to you, for example, in the form of Excel time series and a "Sanity Check" overview as a PDF.

How detailed you want to use the check depends on the complexity and heterogeneity of the contracts and, of course on your individual wishes. In a subsequent telephone conference, we will discuss the evaluation together and advise you in preparation for the next steps in the negotiations.

"UmweltBank is a pioneer in financing PPA projects in Germany. The individual studies and expert knowledge of Energy Brainpool formed the basis for the creation of our groundbreaking concept".

Thomas Benz
Deputy Director Energy and Infrastructure
UmweltBank AG