OwnEnergy

To date, wind energy is the most cost-competitive renewable energy option on the market.  Demand for “green power” (electricity from clean sources like wind that is sold to customers at a premium price) and environmental requirements are creating buyers for wind energy and competitive rates. Before investing thousands of dollars into wind resource assessments, permitting, and pre-construction activities, a developer will secure tentative commitments via a Power Purchase Agreement (PPA) from one or more buyers.

A Power Purchase Agreement is a long-term agreement between the owner of the wind farm and a utility or other wholesale power provider. Negotiating and signing a PPA is a critical step in the development of any wind project because it secures a long-term revenue stream through the sale of energy from the project. Securing a PPA will typically also be a condition to any equity and debt financing of the project. Power may be sold through a PPA to an investor-owned, municipal or rural electric cooperative utility in the local market or, in some cases, to more distant utilities or wholesale or retail customers in unregulated markets. Given that OwnEnergy’s projects tend to be smaller and community-owned, smaller, local utilities such as municipal or rural electric cooperatives tend to be natural buyers. 

While price terms are often thought of as the most important element of a PPA, one typically includes many vital provisions addressing issues such as the length of the agreement, the purchase and sale of energy, curtailment agreements, transmission issues, milestones and defaults, financial security, insurance and environmental attributes or credits.