Power Purchase Agreements
Cost-effectively decarbonizing companies with bespoke renewable electricity power purchase agreements
Simplifying, Accelerating, and Reducing the Cost of Purchasing Renewable Electricity and Environmental Attributes Through Power Purchase Agreements
Corporations purchase renewable electricity and Environmental Attributes (carbon offsets, RECs, etc.) from large-scale renewable energy projects to cost-effectively achieve net-zero carbon emissions and/or reduce their exposure to rising carbon and electricity prices. However, to date, the process of identifying transaction-ready large-scale renewable energy projects, determining the most valuable project with which to transact, and entering into bilateral agreements to purchase the renewable electricity and/or Environmental Attributes from the project is intricate, slow, and expensive.
We simplify, accelerate, and reduce the cost of purchasing renewable electricity and Environmental Attributes through Power Purchase Agreements for our Clients through process of:
Educating
Client's by providing a market-specific electricity and carbon report on power purchase agreements.
Guaranteeing
Results for our Clients, providing them with the opportunity to exit at no cost if predetermined success metrics aren't achieved.
Eliminating
Client's upfront third-party costs for market education, contract origination, and financial analysis.
Screening
All available renewable energy and energy storage projects to provide Clients with access to low-risk transaction-ready and high-value power purchase agreements.
Improving
Client's economic analysis by providing access to bespoke financial models to evaluate multiple scenarios and create detailed cash flow projections.
Adjusting
Contract terms for power purchase agreements to meet the unique needs of our Client by allocating risk to the party best positioned to manage it.
Why Do Corporations Enter Into Power Purchase Agreements?
1) In some markets, the cost of renewable electricity has fallen below both the current and forecasted market prices of electricity, making the forecasted economics of power purchase agreements profitable;
2) PPAs provide protection against rising electricity costs, as the higher the market price of electricity the more profitable the PPA becomes;
3) PPAs provide protection against rising Environmental Attribute (Carbon Offset or Renewable Energy Certificate prices, as PPAs provide access to a fixed price and stable long term supply;
4) PPAs provide a scalable method for corporations to offset costly or hard-to-abate carbon emissions; and,
5) They enable corporations to achieve net-zero carbon emissions through a single and immediately actionable transaction.
Landscape for Power Purchase Agreements in Alberta
1. Alberta’s PPA Landscape Has Historically Led Canada
Alberta has long been Canada’s most active market for corporate renewable Power Purchase Agreements, with dozens of deals signed since 2017 across wind, solar, and energy storage projects — supporting meaningful growth in renewable capacity in the province.
2. Alberta Has Recently Faced a Period of Policy-Driven Pause
Despite strong underlying demand from corporate buyers and large energy users, provincial government-driven project permitting uncertainty combined with electricity market restructuring has resulted in a sharp reduction in power purchase agreements being executed in Alberta.
3. Load Growth and New Demand Profiles Are Reshaping Needs
Alberta’s deregulated electricity market is now bracing for a significant near-term 10% increase in province-wide demand, with 1,200MW of new load recently allocated to data centers and more in the connection queue. This dynamic underscores a shift in how power purchase arrangements are being structured to include energy storage in order to balance load matching, reduce ramping charges, and progress towards 24×7 carbon-free electricity.
Who Else Is Using PPAs?
Zenith supported Shaw Communications by providing them with market education on power purchase agreements, as well as the electricity and carbon markets in Alberta. Following this, Zenith led the process of identifying and screening potential projects with which to transact, soliciting offers from project developers, and evaluating bids, resulting in Shaw executing a 15-year PPA with Capital Power that was announced in January 2023. In addition to Shaw, the corporations on the left have all leveraged power purchase agreements to purchase electricity and/or Environmental Attributes from renewable energy projects in Alberta.
Who Else Is Using PPAs?
Zenith Power supported Shaw Communications by providing them with market education on power purchase agreements, as well as the electricity and carbon markets in Alberta. Following this, Zenith led the process of identifying and screening potential projects with which to transact, soliciting offers from project developers, and evaluating bids, resulting in Shaw executing a 15-year PPA with Capital Power that was announced in January 2023. In addition to Shaw, the corporations on the left have all leveraged power purchase agreements to purchase electricity and/or Environmental Attributes from renewable energy projects in Alberta.