Power Purchase Agreements

As an Independent Power Producer (IPP), NrG can offer clients a Power Purchase Agreement (PPA) as part of their overall energy solution. A PPA is a long-term contractual agreement to buy 100% of the electricity generated by an energy system from the system owner (the IPP). The electricity is bought at a fixed price and escalation rate (usually CPI) for the duration of the PPA. The energy system itself is typically located on the client’s premises. In essence, a PPA forms a “third party” financing model, with a separate taxable entity to procure, install and operate energy generating assets on a consumer’s premises. The separate taxable entity is known as a “special purpose vehicle” (SPV). PPAs normally have a specific focus on sustainable and efficient technologies, such as solar photovoltaic (“PV”).

  • SPV signs long-tenure PPA with client
  • SPV owns and operates power plant, produces electricity and sells at agreed R/kWh to the site
  • Site pays per PPA agreement
  • NrG owns the equity of SPV
  • NrG arranges finance for the SPV
  • NrG may be open to negotiations on ownership of the SPV*

*Next Renewable Generation retains management of the power plant

Benefits of a PPA

By addressing the real-world financing concerns of a project, PPA’s can help make a renewable proposal a renewable solution. Here’s how:

No Upfront Capital

NrG will purchase all the components and pay for the installation.

Energy Hedge:

Lock down electricity rates for the long-term and avoid volatility in the future.

No System Risks:

No performance or technology risk.

Environment:

Help make your community more environmentally friendly

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