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Que Es Un Power Purchase Agreement

Que Es Un Power Purchase Agreement

An electricity purchase contract (AAE) or an electricity contract is a contract between two parties, one that produces electricity (the seller) and the other that wants to buy electricity (the buyer). The PPP sets out all the terms and conditions for the sale of electricity between the two parties, including when the project will begin operating commercially, electricity delivery schedule, delivery penalties, payment terms and termination. An AEA is the main agreement that defines the revenue and credit quality of a production project and is therefore a key instrument of project financing. There are many forms of PPA in Use Today and they vary according to the needs of the buyer, seller, and financing against the parties. [1] [2] An electricity purchase agreement (AAE) is a legal contract between an electricity producer (supplier) and a buyer of electricity (buyer, usually an electricity supplier or a large electricity purchaser/distributor). Contractual terms can take between 5 and 20 years during which the buyer buys energy and sometimes also capacity and/or ancillary services from the electricity producer. These agreements play a key role in financing assets of own property producing electricity (i.e. not held by a utility company). The seller under the AAE is usually an independent electricity producer or a “PPI.” A new form of PPP has recently been proposed to commercialize electric vehicle charging stations through a bilateral form of electricity purchase contract.

The buyer generally requires the seller to guarantee that the project meets certain performance standards. Performance guarantees allow the buyer to plan accordingly when developing new facilities or when executing application plans, which also encourages the seller to keep appropriate records. In cases where the supplier`s delivery does not meet the buyer`s contractual energy needs, the seller is responsible for restructuring the buyer`s debt. Other guarantees can be contractually agreed, including availability guarantees and performance curves. Both types of safeguards are more applicable in regions where the energy used by renewable technologies is more volatile. [9] An AAE (Power Purchase Agreement) is a long-term agreement between a renewable energy developer and a consumer on the purchase of energy. The Iberdrola Group has extensive experience in this sector in countries such as the United States, Mexico and Spain. An AAE is a long-term agreement to purchase clean energy from a given asset at a predetermined price between a renewable development developer and a consumer – usually a company that needs large amounts of electricity – or between a developer and a supplier who then resells the energy.

Signing an AEA can be interpreted as the sale of a project and its environmental attributes (original guarantees): it is a commitment that allows a renewable energy developer to make an investment decision using the criteria of profitability against risk and/or to obtain the necessary financing to carry out the project. According to BloombergNEF`s latest Corporate Energy Market Outlook, companies around the world purchased a record amount of clean energy through PPAs in 2019. In total, approximately 19.5 gigawatts (GW) have been signed for renewable energy contracts between more than 100 companies in 23 different countries. 13.6 GW were signed in the United States and 2.6 GW in Europe, the Middle East and Africa.

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