RenewableNI in partnership with A&L Goodbody recently delivered the latest in its energy seminars, examining the growing interest in Corporate Power Purchase Agreements (CPPAs).
Delegates heard from Niamh Collins, Senior Associate at A&L Goodbody, who provided legal insights into the agreements, Russell Smyth, Partner at KPMG, who gave an overview of route to market considerations and emerging trends, and James Temple, Renewables Manager from Flogas who explained how CPPAs can be packaged through ‘sleeving’ and the benefits this can bring.
Can CPPAs invigorate the market for renewable developers amidst challenging headwinds? Steven Agnew, Director at RenewableNI, reflects on insights shared by the expert panel on this increasingly popular purchase and finance option.
First things first, what is a Power Purchase Agreement?
Put simply, a PPA is an agreement between a buyer of electrical energy and seller of electrical energy. A CPPA operates in the same way whereby the buyer is a corporate entity who uses the power.
Typically structured as a long-term contract, CPPAs enable companies to buy electricity directly from a renewable energy generator, such as a solar or wind farm, benefiting from its associated green credentials. This differs from the traditional approach of buying electricity from conventional suppliers, allowing companies to secure renewable energy at a fixed price.
While relatively underutilised in Northern Ireland, CPPAs are not new. Globally, CPPA arrangements accounted for 60GW of electricity in 2024. Notably they have grown in popularity, in the Republic of Ireland, particularly in the technology sector, accounting for 15% of renewable electricity capacity last year.
Supporting decarbonisation
PPAs can help businesses maximise the value of renewable energy benefits, such as Renewable Energy Guarantees of Origin (REGOs) or Guarantees of Origin (GoOs), supporting their decarbonisation agendas. While REGOs are accepted within the UK, they are not accepted in the EU which can add an extra layer of complexity (although this is not insurmountable) for organisations who want to avail of CPPA opportunities across the border. While the NI market is growing, opening up the Republic of Ireland market would present a significant opportunity. RenewableNI is working with its counterparts in GB and Ireland to make this happen.
Versatility
Another benefit of PPAs is the long-term price security they bring, the opportunity to finance investments in new power generation capacities and the reduction of risks associated with electricity sales and potential fluctuations.
From ‘synthetic’, ‘sleeved’ or ‘private wire’ models, there are various CPPA models which can be structured in a way to best suit your organisation’s goals. From the seminar, it’s clear that Northern Ireland has superb consultancy, legal and broker expertise to help generators and off-takers on what may seem at first glance to be an intricate agreement.
The KPMG report “Accelerating Renewables in Northern Ireland” commissioned by RenewableNI, revealed that 82% of developers consider Northern Ireland an unattractive location for renewable energy investment. As Northern Ireland awaits the announcement of the Renewable Energy Price Guarantee scheme, CPPAs can provide an alternative and attractive route to market.
