Power Purchase Agreements

Contact: Dr. Paolo Gabrielli

The scope of the project is creating a tool that enables the assessment of long-term energy contracts, namely corporate Power Purchase Agreements (PPAs), within the framework of Renewable Energy (RE) projects.

While falling prices and sustainability commitments are increasing the demand for RE, various challenges, together with a lack of proper tools, prevent the wide implementation of corporate PPAs. Such challenges include (i) the lack of historical generation data; (ii) the difficulty in forecasting future electricity prices and renewable generation; (iii) the wide range of technology- and geography-dependent RE projects; (iv) potential counter-effects and risks preventing PPA investments.

In other words, a lack of proper assessment tools is preventing a required wider implementation of corporate PPAs. This project aims at closing this gap by developing a stochastic modeling framework that connects RE project developers and buyers and allows to advise corporates on the performance and risk of PPA contracting strategies. These strategies are defined by the selection, size, location, and timing of wind- and solar-based projects, coupled with energy storage when applicable, across different European markets. This allows (i) to define optimal PPA solutions that minimize the environmental impact of corporates while maximizing their cost savings, and (ii) to increase the corporates understanding of PPA contracts.

The development of such a tool will allow answering research questions related to the optimal development and deployment of PPAs and their impact on the overall energy system. Furthermore, it will foster PPA application to real-world problems, helping to push the transition to renewable energy.