What is a physical power purchase agreement?
A Physical PPA (Power Purchase Agreement) is a contract between an energy buyer and Lightsource bp typically at a fixed rate for physical delivery and allocation of a utility-scale solar plus storage facility’s products. A solar project with a physical PPA is normally located close to the energy buyer’s load.
In a physical PPA, an energy buyer signs a long-term contract with Lightsource bp who will build, maintain, and operate a renewable energy system either on the customer’s property (on-site) or off-site. Regardless of whether the system is on-site or not, the customer receives the physical delivery of electricity through the grid. The customer agrees to purchase the power at a set price over an agreed upon term, and Lightsource bp assumes the risks associated with owning and operating the system.
Available products with a physical PPA:
- Environmental attributes
- Ancillary services
Location: Solar project is locally or regionally sited because basis is typically reduced when project node falls within the settlement zone or hub, as a result of higher correlations.
Typical customers: Retail Providers, Utilities, Corporates, Cities, Universities
- Cost savings
- Long term electricity stability and predictability
- Ability to purchase large volume of electricity through a single transaction