German scientists have identified 18 typologies of power purchase agreements for the renewable energy market. Their research is intended to support policy makers, scientists and investors in implementing their own PPA analysis and choices.
A group of researchers in Germany have created a comprehensive overview of the existing structures and features of power purchase agreements (PPA) in an effort to support policymakers, scientists and investors in implementing their own PPA analysis and choices.
“Given the sometimes complex nature of PPAs, this lack of proper classification complicates further research and adoption by practitioners in the field,” the academics said. “Therefore, this study provides new information by identifying, describing and classifying different PPA structures to provide an overview, allowing better orientation and comparability.”
The research group identified several PPA structures based on their key contract feature and noted that these structures are not mutually exclusive. The key parameters were generation technologies, energy attribute certificates (EACs), age and contract duration of assets, type of counterparty, multiplicity of parties, direction of delivery, location of assets, third party balancing, physical nature of delivery, price structures, delivery schedules, storage usage, subsidies and insurance.
The academics also created a ‘morphological box’ that included all 18 PPA typologies they identified.
“While creating a structural overview of known renewable PPA contract parameters, the morphological box also provides a method for designing differentiated PPA contracts, taking into account the constraints and interdependencies between different contract parameters,” the team emphasized, noting that the box contains three more parameters: project, counterparties and contract. “In addition, it can be used to estimate how much risk the various contracting parties bear.”
Moreover, the morphological framework creates interdependencies between the contract parameters of the PPAs.
“Since the field of PPAs is constantly evolving and there is no standardized definition so far for most of the available parameters, this analysis cannot fully guarantee a full set of existing interdependencies,” the researchers specified. “However, all known interdependencies are characterized based on the available data.”
The research results are also intended to support the standardization of contracts, they concluded.
The review was presented in the study “Assessment and morphological analysis of types of renewable energy purchase agreements”, which was published in Renewable and sustainable energy assessments. The group consisted of scientists from the Carl von Ossietzky University of Oldenburg and the FernUniversität in Hagen.
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