New long-term PPA option aims to boost investment in low-carbon generation

To support the drive towards a net-zero carbon economy, ENGIE offers long-term power purchase agreements (PPAs) that are tailored to the individual requirements of developers and funders. These long-term agreements provide the guaranteed income developers need to secure funding for their new-build energy generation plants.

As the world emerges from the shock of Covid-19, there is a strong desire among businesses and governments to build on the dramatic carbon reductions we have seen over this period. It’s an opportunity to accelerate progress towards net-zero carbon – and new renewable and low-carbon electricity generation has a major role to play.

Debt repayment reassurance
Developers can choose PPAs of any length to suit the funding requirements of their specific generation plant. Crucially, contract lengths can be matched to the debt repayment periods for financing each development. That enables developers to provide banks, investors and other funders with the assurance of guaranteed payments for all output from the new plant, from which the developer can repay any loans or investments over the agreed term.

Backed by the financial stability of the ENGIE group, our PPAs offer investment-grade payment guarantees that are accepted by all major banks, funders and legal firms.

New long-term PPA option aims to boost investment in low-carbon generation

Various PPA pricing models are available, which can be adapted to suit developers’ funding requirements, investor stipulations and attitude to risk. We can provide PPAs that offer index-linked pricing, which gives developers a price for their output that reflects current market values. The prices paid are based on trusted market indices, such as N2Ex.

Index-linked PPAs can also include a number of options, to meet the requirements of each site. For example, there is the option to hedge seasonal prices to limit price exposure. Or to build in floor prices, which effectively gives developers a guaranteed minimum price for all output. This can provide valuable reassurance to investors. Our PPAs can also support Contract for Difference (CfD) payments and other government subsidy schemes, such as the Feed in Tariff (FiT).

Flexible pricing options
Now that many government subsidies have come to an end, ENGIE is determined to help plug the funding gap by offering bankable, secure PPAs to support the growth of renewable and low-carbon generation in the UK. With that in mind, we are expanding our PPA offering to include the option of fixed-price agreements for longer-term contracts.

By adding the option of a 100% fixed-price PPA to our long-term offerings, we are enabling developers to enjoy price certainty for the entire duration of a long-term PPA for the first time. Such fixed-price options have only previously been available on shorter-term PPAs.

Supporting low-carbon and renewable generation
ENGIE has a proven track record of working with major banks, investment houses and law firms to agree acceptable terms and to devise secure PPAs for the whole range of large-scale generation technologies that are needed in the UK. These include solar, wind, biomass, energy-from-waste, hydroelectric, advanced conversion technologies, landfill gas, anaerobic digestion and more.

We are eager to continue leading the way in this market to reinforce our own commitment to a zero-carbon future. We hope that by providing guaranteed payments for all output from new assets, our PPAs can help to get many more new-build plants off the drawing board and into development as quickly as possible. 

ENGIE offers long term PPAs for all types of generation technology