Renewable Electricity Agreement

Customers with Time of Day Secondary (TODS), Time of Day Primary (TODP) and Retail Transmission Service (RTS) tariff plans may be able to enter into a special contract that allows them to purchase electrical power and all associated environmental attributes from a renewable energy generator. This contract would be entered into bilaterally with the Corporation and is subject to approval by the Kentucky Public Service Commission. Unlike a physical PPA, a virtual PPA (VPPA) is more of a financial contract than an electricity contract. The customer does not receive electricity and is therefore not a “virtual” power purchase agreement. To support these goals, the utilities launched a tender for up to 200 MW of renewable energy in early 2019. The Rhudes Creek solar power plant proposed by ibV Energy Partners was chosen as the most cost-effective solution. To help Dow and Toyota achieve their sustainability goals, KU has entered into two separate renewable energy (RPA) agreements with the two customers. KU has also entered into a Power Purchase Agreement (PPA) with Rhudes Creek Solar, LLC, a wholly-owned company of ibV Energy Partners, for the generation of power from a new 100-megawatt photovoltaic power plant in Hardin County. The plant uses state-of-the-art technology to generate the largest amount of energy possible for its size. Temporal security PPAs for renewables can be negotiated between the producer and the customer at any time – there is no need to wait for government tenders. Instead of participating in an auction with an uncertain outcome, a PPA contract can be negotiated bilaterally according to a schedule suitable for all parties. In 2019, Dow derived about 13% of its total electricity consumption from renewable sources.

With these new agreements, this amount is expected to increase when these projects are approved and posted online in the coming years. A power purchase agreement is essentially a two-party contract in which one party sells both electricity and renewable energy certificates (RECs) to another party. In renewable energy PPAs, the “seller” is often the developer or project leader, the “buyer” (often referred to as the “buyer”) is the C&I unit. C&I PPAs in renewable energy can take two main forms – physical or financial (the latter often referred to as “virtual”). The best structure depends on the markets in which the client and the projects are located, as well as the client`s objectives, priorities and risk tolerance. Too often, these transactions are portrayed as money makers, but the real story is much more complicated. This related article delves deeper into the risks inherent in renewable energy PPAs and how they can be mitigated. Where is electricity consumed? Will production exceed the load? Choosing a renewable energy PPA can help your business reduce carbon intensity and meet its renewable energy goals.

Wind and renewable PPAs typically involve the transfer of guarantees of origin to the consumer, which provide proof that you have purchased this amount of renewable energy. Business customers can purchase energy from a renewable energy producer. A power purchase agreement (PPA) is a contract between a “buyer” (such as a company) and the developer of a renewable energy project. There are two main types of PPAs: physical and virtual. Although the mechanisms differ in all respects, the contract ensures that for each megawatt-hour (MWh) of energy sold (up to a certain number of MWh), the proponent will receive a fixed price and will receive the associated RECs in return. PPAs are long-term contracts that span 10 to 20 years. REBs will be delivered over time as the project produces and sells energy. Aggregation of Community Choices (CCA): These programs are local government agencies that procure electricity on behalf of customers in a specific geographic area.

CCAs can choose where to get their electricity from, and many choose to provide more renewable energy than a utility. CCAs can obtain energy from a PPA with a project developer, or they can purchase unbundled REBs and pass them on to their clients. This means that the electricity doesn`t necessarily come from a local renewable energy project, and the money you pay as a CCA customer doesn`t necessarily lead to the construction of a new renewable project. Many companies source renewable energy as part of their sustainability strategy. While reducing energy consumption is the first step in reducing costs and emissions, businesses need to maintain ongoing operations. Renewables can cover this remaining electricity demand. In green electricity or “green pricing” programs, the utility typically charges a premium for each kilowatt-hour you buy, which appears as an item on your utility bill. In a block option (a fixed amount of energy), you get a set amount of kilowatt hours of renewable energy for a fixed monthly fee. With a percentage of the monthly purchase, your business is billed per cent per kilowatt hour and you buy a percentage of your monthly electricity in the form of green electricity – for example, 70% renewable electricity, while the rest can come from conventional or brown electricity. Basically, you can subscribe or unsubscribe to a green electricity program at any time, which is a flexible option. A power purchase agreement (PPA) is a long-term contract under which a company agrees to purchase electricity directly from a renewable energy producer. Power purchase agreements provide you and the project proponent with financial security, removing a significant barrier to the construction of new renewable power plants.

PPAs therefore contribute to providing more renewable energy and saving CO2. Your business can make a difference and shape the future of renewable energy. Contact us and we will offer you the best tailor-made solution for your business – for a sustainable and long-term partnership! Renewable Energy Certificates (RECs) from all projects (with the exception of the U.S. Petaluma Coast Guard) were sold by the solar project owner to improve the project`s profitability. If high-quality REBs from a PBA project are sold, low-cost national replacement REBs must be purchased to challenge the federal renewable energy target and the project premium locally. This is also known as REC swap. However, if claims are made about a project with REC exchange or REC sales, an agency cannot claim to use electricity produced by local solar energy, e.B. if RECs are sold or exchanged for another type of REB such as wind power. Most on-site systems continue to sell and transmit electricity to the grid; Electrons don`t flow directly to your outlets and you always have an electricity bill. Once the on-site system is registered, a REC is issued for each megawatt-hour of renewable energy it generates. REBs generated by on-site activities should always be removed if you want to use them for your purposes. In some cases, the system may produce more energy than you consume on this site, in which case you can apply the REBs you receive to other parts of your operation or sell them on the voluntary market.

Renewable energy purchase agreements offset the consumption of electricity from other sources and increase the use of renewable energy to power Dow`s operations. These include three solar power deals near Dow`s sites in Brazil, Kentucky and Texas, as well as an agreement to give Dow`s Bahia Blanca site in Argentina access to wind capacity. When commissioning a renewable energy PPA in companies, business buyers need to think carefully: We understand that many of our key customers have sustainability goals and want to diversify their power supply. Our green rate includes an option for our largest customers to purchase energy from new renewable energy projects and have it delivered to them through our transmission and distribution system. Electricity cost PPAs ensure long-term security of your electricity costs and protect your business from energy price volatility. The prices offered are generally lower than analysts` forecasts for the future price of electricity, resulting in potential savings combined with tailor-made flexibilities. As more and more companies focus on becoming 100% renewable, largely due to the recent push to set science-based carbon reduction targets, PPAs, virtual PPAs and RECs are three acronyms that are widely used in conversations related to companies` energy strategies. But I admit it – even though I`ve been rooted in the energy industry for a decade, my mastery of what these acronyms really meant has been limited at best. Of course, I could tell you that PPA stood for Power Purchase Agreement or that a REC was a renewable energy certificate, but I didn`t really understand what they were. .

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