Virtual Power Purchase Agreements (VPPAs)

About service

Renergy offers multi-year futures contracts to supply electricity at fixed tariffs regardless of changes in market conditions. This allows businesses to plan their energy costs over the long term, ensuring cost stability and predictability irrespective of market fluctuations.

Virtual Power Purchase Agreements (VPPAs) provide unique conditions for businesses in the field of energy solutions. This is an agreement between the green energy producer and the consumer which regulates financial guarantees of a constant price over a long period of time.

Features and Benefits

Financial transaction.

A VPPA is primarily a financial instrument. The power plant does not have to be connected with the consumer. However, since the generating capacity is part of the Renegy group, the consumer and the producer can have a contract to fix the price of electricity as solar energy itself doesn’t have a fluctuating cost component.

Electricity price hedging.

A VPPA helps stabilize energy costs by locking in the cost, providing security during periods of market volatility.

Contribution to decarbonization.

This service allows customers to contribute to the development of renewable energy and the reduction of greenhouse gas emissions by supporting green energy projects.

Risk reduction.

Because VPPAs fix the price of electricity, they help reduce the risks associated with price fluctuations in the energy market.

Easy to carry out.

VPPAs do not require additional infrastructure or changes to a company's existing energy system. However, the consumer must demonstrate its financial stability to be able to implement this instrument.

This model is an effective tool for businesses seeking to achieve sustainability goals and reduce the environmental impact of their operations, while providing their business with long-term planning and predictable tariffs. Virtual power purchase agreements help simultaneously realize consumer’s economic and environmental goals.

Business goals

The purpose of this service is to provide a business with fixed electricity tariffs for several years ahead. This allows you to create predictable conditions for your business development, reduce future production costs, and gain competitive advantages. This approach protects businesses from future energy price hikes and makes the costs more manageable and predictable.

What type of businesses benefit from this?

This service may be of interest to any business that plans its development for a period of several years in advance and for which energy costs make up a substantial portion of operating expenses.

This is especially true for companies with a high level of electricity consumption, such as manufacturing companies and large industrial enterprises, as well as for facilities with constantly growing energy needs. Companies in industries where energy costs directly impact the cost of final products or services will find this service particularly useful.

Fixed electricity tariffs help businesses more effectively manage budgets, plan their cashflows, and reduce operational risks associated with fluctuations in energy prices. This provides greater financial stability and predictability, which is critical for long-term strategic planning and for strengthening the business’s competitive position in the market.

Prospects for companies partnering with Renergy

Electricity prices in Ukraine have never decreased and the global trend also points to their growth trend. The development of electric vehicles infrastructure, decarbonization processes, launch of artificial intelligence and associated increase in electricity consumption will all contribute to higher demand, and hence higher prices per kilowatt-hour in the coming decades. The only factor that could change this situation is the emergence of revolutionary energy sources. However, according to forecasts, the commercial use of thermonuclear fusion will unlikely be possible earlier than 2045. In the meantime, the cost of electrical energy will likely only increase.

Renergy offers its clients a new financial instrument in the form of a virtual energy supply contract, a long-term contract for the supply of electricity at a fixed price. This allows businesses to lock-in the price regardless of market fluctuations.

These financial electricity futures smooth out any potential market fluctuations in electricity prices for the business, allowing the client to plan and forecast years in advance. Renergy achieves this by having sufficient volumes of its own solar generation, the price of which does not depend on fossil fuel prices.

Of course, the customer must also share certain risks with Renergy and guarantee the purchase price even in the event of a sudden decline in electricity market prices. However, even such unlikely financial risks are worth obtaining a predictable and guaranteed fixed price for one of the main factors of production cost of any business – electrical energy.