As a smart trader and producer of green electricity, Alpiq could offer its customers a range of tailor-made integrated services that combine a standard comprehensive supply contract with flexibility and decentralised in-house generation from different technologies. ERG has signed a ten-year contract with TIM in Italy for the supply of 3.4 TWh of green energy. Intermittent actual electricity generation from a renewable power plant may differ from production forecasts and may also not match the baseline demand of a business buyer (which is likely to be flatter, with a pronounced variation between working and non-working days). Proponents will insist on having a mechanism to renegotiate key provisions of a corporate PPA that could be affected by a change in the law. Such a mechanism will attempt to trace the agreement back to the original economic intent, especially if the company`s PPA is the main source of revenue for a project. In addition, the Italian electricity and gas supply market will be fully liberalised from the beginning of 2023, opening up a number of business opportunities in the near future. In fact, the attractiveness and bankability of long-term enterprise PPA contracts depend to a large extent on the creditworthiness of the business buyer. For electricity produced by an existing renewable energy plant, the duration of the corporate PPA in Italy is usually short (1-5 years). In contrast, the duration of the corporate PPA for electricity produced by a renewable energy plant under construction is generally longer (10-15 years). Another innovative sales-side mitigation tool for form risks can be the integration of behind-the-meter electricity storage technologies as well as renewable energy projects.
The seller can use the electricity storage system to offset peaks in renewable energy production, as well as to help offset imbalance costs and other technical limitations in the grid. In Italy`s post-Covid recovery plan, the government highlights its intention to cut red tape and streamline the legal system. However, these intentions must be translated into concrete measures, one of the most important reforms being defined being the DL Semplificazioni (simplification regulation). This is an important development, as a short and simple approval process is essential to unlock the potential of corporate PPAs in Europe. Recognising this fact, Article 16 of the Renewable Energy Directive stipulates that Member States must shorten and simplify the authorisation procedure for new and recharged projects. Alpiq has a long-standing historical link with Italy, which is based on the cross-border transmission of electricity. Founded in 1999, Alpiq Italia currently focuses on power generation and cross-border trade. Today, Alpiq is involved in 14 power plants, which are divided into thermal, hydroelectric, wind and photovoltaic systems with a total capacity of about 770 MW. A total of 104 colleagues in Milan and in power plants work not only in electricity generation and electricity trading, but also in the sale of electricity and gas, the management of energy portfolios for large consumers and the marketing of electricity from third-party power plants. The buying company`s position on tenor risk will depend on two things: its sensitivity to fluctuations in electricity prices and its estimated future demand for electricity. Alpiq is a European energy shop.
In Italy too, we rely on the experience of all europe to offer tailor-made solutions. Our knowledge of European electricity markets allows us to minimize uncertainties related to intermittent electricity production or price fluctuations. Both announcements reflect the desire of companies to sign up for renewable energy in Italy, with much more potential to realise. Other agreements like this will enable Italy to meet the renewable energy targets set out in its energy and climate plan and help the EU meet its 2030 and 2050 climate targets. Proponents will be guided by lenders` minimum term requirements and electricity price forecasts. As the pressure on companies to decarbonise their electricity supply is also increasing, their interest in green energy supply through PPAs is also increasing, creating the conditions for significant growth in the Italian PPP market over the next decade. However, thanks to intelligent digital telemetry and process control, innovative mitigation instruments are emerging on the buyer`s side that can allow the buyer to adapt its grid load to the production profile of the renewable power plant or grid imbalances. These technologies can address an imbalance by immediately shutting down devices that don`t need electricity until the price spike is over. Volume risk reflects the variability of a facility`s electricity generation over a period of time, which can be a season or an entire year.
The term risk refers to the period during which the acquiring company is required to pay for the contractually agreed electricity under the enterprise PPA. This can be a fixed period of duration or an extended period of certain conditions. Virtual PPAs are financial derivatives (e.B contracts for difference) in which producers and buyers agree on an exercise price paid for each unit of energy produced over an agreed period of time. The project sells electricity on the open market and the customer buys electricity on the open market. If the market price exceeds the strike price, the developer pays the difference to the customer. Conversely, the client compensates the promoter in the event that the market price falls below the strike price. From an economic perspective, a long-term fixed-price corporate PPP is a hedge against fluctuations in electricity prices and can also avoid long-term carbon and environmental penalties by complying with current and future regulatory requirements. .
