Corporate Power Purchase Agreements—an introduction to structuring power purchase arrangements between large energy users and remotely located generators
Produced in partnership with James Stanier of Gowling WLG
Corporate Power Purchase Agreements—an introduction to structuring power purchase arrangements between large energy users and remotely located generators

The following Energy practice note Produced in partnership with James Stanier of Gowling WLG provides comprehensive and up to date legal information covering:

  • Corporate Power Purchase Agreements—an introduction to structuring power purchase arrangements between large energy users and remotely located generators
  • What is a Corporate PPA?
  • Why are Corporate PPAs used?
  • Drivers for corporate buyers
  • Drivers for generators
  • Types of Corporate PPA
  • Virtual or sleeved PPA?
  • Future prospects for corporate PPAs

What is a Corporate PPA?

A corporate power purchase agreement (PPA) is an agreement under which a corporate entity purchases electricity (usually renewable electricity) from an electricity generator for use in its own business. For the purposes of this Practice Note, we are assuming that the corporate buyer is not located at the same site as the generator. For arrangements in respect of co-located corporate buyers supplied via private wire, see Precedents: Power purchase agreement (PPA)—exempt power supply and Connection agreement for private wires.

There are two main structures employed in corporate PPAs as we outline below. Both are more complicated than the ‘classic’ PPA, which involves just one agreement under which a generator agrees to sell all of the electricity generated by its generating station and associated benefits to a licensed electricity supplier (see Practice Note: Power purchase agreements (PPAs)—key terms and issues).

The additional complexity of corporate PPAs arises as a result of the need to involve a licensed supplier (in addition to generator and corporate buyer) in the contractual framework. The need arises because the corporate buyer will not have the necessary rights to have the electricity conveyed from the generating station across the grid to its premises. It also means that the licensed supplier can manage the fluctuations in output from the generating station, ensuring continuity of supply to the corporate buyer.

The need

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