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Power Purchase Agreement (PPA)
A PPA is a long-term contract, usually around 10 years, which increases renewable energy production and is often based on wind power. With the help of a PPA agreement, the electricity producer and consumer can secure their electricity price for a longer period of time.
The PPA agreement is usually based on wind power and is suitable for electricity users whose annual electricity consumption is about 20 GWh or more and who are interested in purchasing green electricity at a low price.
What are the benefits of a PPA?
With the help of a PPA agreement, the electricity producer and consumer can secure their electricity price for a longer period of time and thus significantly reduce their risks in the electricity market. The advantage for both parties is the safety and predictability of delivery, along the switch to renewable energy and reduced emissions.
The electricity supplied under the agreement can be chosen to be produced either in one or more wind farms in the Nordic countries. Typically, the contract also agrees on a fixed quantity, price and period for the electricity supply.
With the increased price risks in the electricity market, the demand for PPA contracts has grown strongly in the market. These contracts are concluded bilaterally between the seller and the buyer, instead of a traditional electricity exchange, in which case the reliability of the electricity supplier is emphasized.
What is Gasum's role in making the PPA agreement?
Our role in PPA agreements is to enable the needs of electricity producers and users to meet effectively by offering PPA agreements widely to all types of electricity users, regardless of industry. We are able to offer electricity users the best solutions for their electricity procurement needs by combining the use of PPA agreements in the best possible way with the company's energy procurement strategy.
