Corporate power purchase agreements (CPPAs) are having a moment. Instead of a traditional supplier contract, a CPPA represents a direct agreement between the energy generator and consumer (often brokered by a supplier). A record number of CPPAs were signed in 2023, representing a 12% increase on the previous year.
2024 looks set to be another big year for CPPAs. In January, Amazon signed a CPPA with French multinational ENGIE to receive power from an offshore wind farm in Scotland. In February Google signed its biggest offshore wind contracts to date. And in April, food multinational Cargill signed a CPPA that will provide it with 1TWh of green electricity over the next decade.
Alongside the big names, businesses of all sizes are increasingly seeing the benefits of signing a CPPA. Many remember the shock of coming out of contract just as the energy crisis was biting, and being offered new supplier deals at double or triple the previous price. A CPPA is a longer-term arrangement on agreed terms, which protects businesses from the volatility of the wholesale market. That longer-term commitment also allows generators to offer their energy at below market price, making it a win-win. Of course, it’s also a win from a climate point of view because it means directly supporting a renewable generator.
Turbo-charging your CPPA
So, choosing a renewable CPPA is usually a smart move – but many businesses are not choosing the right contracts, or making the most of the ones they already have.
The main problem is the natural variability of renewable generation. When the weather conditions aren’t right for high output, the supplier brokering the CPPA still needs to deliver energy to the business. So they make up the difference with grid energy, which of course is a mix – not very green in comparison with your 100% renewable wind farm or solar array. In order to label the CPPA as 100% renewable, your supplier will buy Renewable Energy Guarantees of Origin (REGOs) to “green” what it takes from the grid. (We have written many times about the issues surrounding REGOs – the risk of greenwashing, the lack of additionality and so on.)
You can get more out of a green CPPA if you can align your times of high consumption with times of high renewable output. That’s why ENTRNCE created the Matcher, a data platform that offers granular data on both consumption and supply. This allows you to time-shift your consumption so that you consume more green energy – for example, charging up the company’s fleet of EVs when the sun is shining on your generator’s solar panels.
Even better, it allows you to make decisions about the future. Would your consumption be greener if your next CPPA was with a wind farm rather than a solar farm? Would increasing battery storage reduce your reliance on the grid? The Matcher lets you play around with the options and see how different investments can change the make-up of the energy your business consumes. When it comes to making those decisions (or convincing the Board) you have the hard data to back up your choices.
To find out how the Matcher can help with your long-term decisions and effectively turbo-charge your existing CPPAs, book a demonstration today.
