Dual PPA route to market for renewable generators


Buying 100% renewable electricity directly from renewable energy generators is challenging for many companies. Many firms buy electricity that has a green tariff backed by a REGO (Renewable Energy Guarantees of Origin), however, the worries over their credibility have made this a simple cause for concern for firms wishing to enhance their green credentials.

The consultancy Baringa recently published an analysis claiming as much as one-third of electricity marketed as ‘low carbon’ or renewably sourced is in fact anything but. The analysts reported how an over-supply in what is, in effect, a market for REGO certificates, has led in some cases to double- counting of the true amount of carbon-free power being traded.

Additionally, a joint statement from Scottish Power and Good Energy says Ofgem’s regulations need tightening and still permitted practices whereby wholesalers and retailers disguise the origins of supposedly low-carbon power should be outlawed. REGOs need to be made more truthful and transparent, so as to regain lost credibility, the pair say.

No tariff should be classed as ‘green’ which is not based on a PPA from a recognised low-carbon generator, they demand. Formed in 2018, Zeigo is a PPA platform providing generators with a digital route to the market.

Zeigo is helping to fight greenwashing in energy by allowing utilities to procure more of their supply volume directly from generators through Power Purchase Agreements. Utilities can bid for PPAs via the Zeigo platform from a whole range of different generators, who themselves can gain best price and market terms through a competitive tendering process.

Utility PPAs

The crucial difference between the two primary PPA-based routes to market – Corporate PPAs (CPPAs) and Utility PPAs (UPPAs) is the typical contract duration.

CPPAs tend to be negotiated for longer periods, commonly 10-15 years as they underpin the core finance requirements of the project. As a result, they are a good fit for projects still yet to be constructed as developers require long-term structures that provide stable returns.

UPPAs are typically shorter in duration as utilities often struggle to forecast long-term price risk. This results in most UPPAs being negotiated on a 1-3 term, often linked to a price index. This also allows developers to attribute a portion of the energy produced in the short-term market, making the most out of bullish volatility.

In the UK, renewable assets often benefit from government support, which adds stability and helps make projects ‘bankable’, eliminating long-term pricing commitments.

With subsidies soon set to end in the UK, wind and solar projects will need to consider how they can establish long-term fixed pricing agreements in order to stabilise their revenues and secure project finance. PPAs are an obvious solution to this dilemma.

Dual route to market

Zeigo has launched a new platform for renewable energy generators. Through this, energy sellers are connected to a wider network of off- takers, across both CPPAs and UPPAs, providing them with a complete view of the market.

On the UPPA side, Zeigo provides competitive pricing and term from over 25 different utilities. The platform also compiles data on the supplier’s credit rating and track record in managing PPAs.

Max Plumptre, head of supply-side at Zeigo, “For the first-time energy sellers now have a transparent platform for two separate markets. Zeigo is providing exceptional value in both short and long term PPAs.”

Using the latest technology to simplify the PPA procurement process, Zeigo has executed swift PPAs for both Gresham House and Downing LLP, some of the largest funds in the UK.

Lucy Underwood comments from Downing’s in-house asset management team: “Engaging Zeigo facilitated the comparison of a larger range of suppliers, ultimately allowing us to secure the best terms in the market. With the assistance of Zeigo the PPA transaction was made seamless where a quick and efficient service was provided.”

By matching developer needs directly with a large network of renewable energy suppliers and corporate off-takers, Zeigo helps developers secure the best terms in the market simply and efficiently.

The PPA platform

Zeigo’s innovative technology helps companies find the best zero-carbon match for their energy consumption profile. Services include aggregation, access to comprehensive data reports, a tendering tool, machine learning-powered marketplace and the ability to manage energy portfolios across the world, helping accelerate each organisations’ ability to meet carbon reduction and clean energy targets.

Zeigo continues to facilitate digital energy procurement for key industry players across multiple regions. Its PPA platform now hosts over 300 projects totalling around 21GW in capacity. So far, more than 100 renewable energy developers are using the Zeigo platform to access the market, offering sellers a more transparent and efficient route to market across the UK and Europe.

For more information, visit https://zeigo.com


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