On these pages, we outline the essential steps needed to build and manage effective Power Purchase Agreements (PPA) portfolios. From developing credible strategies and decision-making frameworks to selecting the right tools for end-to-end financial and commercial management, we cover it all.
As large energy users pursue ambitious corporate decarbonisation targets, PPAs have become central, providing a clear pathway to securing zero-carbon renewable electricity. However, this brings new challenges. To avoid costly mistakes and ensure long-term success, it is crucial to proactively manage strategic, operational, and financial risks. This involves developing robust frameworks for power sourcing choices to secure buy-in and provide comfort, clarity and rigour for leadership and other stakeholders.
Understanding the challenges of PPA implementation
Strategic risks of PPAs: The cost of inconsistent information
Organisations risk volatility in financial reporting when they rely on multiple, inconsistent spreadsheets or systems. Without structured valuation methodologies for financial PPAs and robust internal audit approaches, financial statements can become unpredictable. This unpredictability necessitates close scrutiny from CFOs, thereby increasing pressure on teams and operational decision-makers.
Operational risks of PPAs: Devolved and inconsistent data sources
Many large energy users struggle to analyse PPA data consistently. Teams in different locations or business units often use varying methods and advice, leading to conflicting conclusions and inefficient risk management. This inconsistency wastes both time and money, and over-reliance on multiple consultants for ad-hoc, last-minute analysis further strains budgets and delays meaningful decision-making.
Financial risks: Lack of clarity for accurate forecasting
The variable nature of renewables like wind and solar can create unpredictable costs, and without a standardised way to evaluate PPAs, companies may face surprises in their financial reporting. This volatility makes it harder for CFOs and their teams to plan effectively.
Join our webinar: Mastering your renewable electricity procurement strategy
Join our experts as they explore the essential steps to build and manage effective Power Purchase Agreement (PPA) portfolios, from developing credible strategy and decision-making frameworks to selecting the right tools for end-to-end financial and commercial management.
This webinar will explore:
- The global market context: The pressure corporates are facing to meet decarbonisation goals and report transparently
- Greenhouse Gas (GHG) Protocol’s Scope 2 Guidance proposed changes: What is the impact of closer matching of the hour in which renewables are generated and the hour of corporate demand?
- The risks and opportunities of renewables investment and purchasing
- Managing PPAs as part of your demand portfolio: How can a portfolio approach effectively manage risk and carbon exposure?
The webinar is on Thursday 6 March, 2pm GMT
Register hereTracking your power demand is about to become effortless. Gone are the days of devolved and inconsistent data sources.
Complete control and visibility of your energy demand portfolio, all in one place, one source of truth. Energy Source, coming soon from Baringa:
Explore some of the key questions large energy users are facing in the wake of the pressure to decarbonise:
What is a financial PPA?
Financial PPAs are no longer a niche concern just for energy procurement teams - they’re now front and centre for CFOs. A financial PPA, or virtual PPA, does not involve the physical sale or purchase of electricity. Read on to understand where and why they are used, and why are they are becoming more common...
Volume Risk, Hedging, and Renewables: What is the Way Forward?
In the evolving energy market, clients are seeking to align their power procurement strategies with decarbonisation goals. The answer lies in adopting a portfolio-level approach to risk management...
The Corporate Catalyst
How can cross-border renewable procurement deliver a faster, cheaper, and more equitable energy transition?
In this study, commissioned by Amazon, we explore how prioritising emissions impact for renewable procurement could allow corporates to catalyse the energy transition...
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