But because all the electricity needs of the computational center on the whole are the same as the amount produced by the wind farm, it can say with certainty that it is powered by renewable energy – after all, the wind farm would not have been built without the PPP. The distributor then guarantees to recharge the renewable electricity with additional electricity if necessary, for example when the wind is not blowing. If the botanical wind farm now sells its electricity on the wholesale market, the data center will make the difference if the market price is less than 60 euros. And if the wholesale price rises above 60 euros, the wind farm reimburses the difference at the calculation center. The physical supply of electricity from a single wind farm to a data centre or plant that could be throughout the country is impractical and would be very expensive, although there are some examples of PPAs like this one. CPPAs differ from the original guarantees. As an original guarantee, an older system, a wind farm was already producing energy and a company would buy the rights to allocate that energy to itself. In a CPPA, the wind farm would not have been built without the company`s funding. Originally, AAEs were supposed to finance 100% of the production assets, but this means very large contractual terms (10 to 15 years) whereas a regular electricity supply contract usually lasts one, two or three years. This non-parity discourages C-I customers, which is why the AAE market is evolving with offers combining the advantages of an AEA and the flexibility of a regular supply contract. In order to ensure that the company can stand above its claims to be operated with renewable energy, it would normally benefit from a renewable energy guarantee of origin (REGO) confirming that the electricity they use comes from renewable sources. In Ireland, the original guarantee system is overseen by SEMO, which operates the electricity market.
Corporate PPAs is a well-established concept in the energy market. An AAE agreed between an industrial and industrial customer (C-I) and an electricity producer requires the purchaser to resume production from a production product for an agreed period and ensures the source of income for the asset during that period. In August, online retail giant Amazon announced it would buy power generation from a Cork wind farm after a similar deal in Donegal to feed its power-hungry computing centers. “Over the last 10 or 20 years, green has made a compromise or borne additional costs. Now people can see these private companies looking at green electricity to keep their costs low in the future. The Irish electricity market is undergoing significant changes, with the introduction of new market rules in the form of an integrated internal electricity market (I-SEM). Under the I-SEM, producers must find a path to the market for their performance and will face new risks – in particular a balance between liability and imbalance costs. Power Purchase Agreements (PPAs) are an important way to achieve the market and risk management instrument, particularly for renewable generators such as wind and solar. This comprehensive course will provide a basis in the PPAs – the different types of contracts, their structure and key conditions, risks and benefits, prices, their current/future application in Ireland and their negotiations. We will draw on our extensive experience in the AAE market to provide examples and practical lessons. There are several different types of PPAs, and this is just one example.