What is a PPA?
Power Purchase Agreements (PPAs), also known as long-term electricity purchase agreements, provide predictability and stability for power purchases. With the recent volatility in the energy market and companies’ drive to meet more stringent environmental goals, PPAs are becoming an increasingly common way for companies to buy electricity. A PPA means that the electricity consumer signs a long-term agreement directly with an electricity producer for a set quantity of electricity at an agreed price. Power Purchase Agreements typically extend 10-15 years into the future.
What are the benefits of PPAs?
Power Purchase Agreements offer energy buyers a way to secure a stable and often cost-effective supply of CO2-free energy while also aligning with environmental and corporate responsibility objectives. Below, we will list a few benefits that signing a Power Purchase Agreement with Fortum includes:
Fixed electricity price guaranteed for years to come:
PPAs provide customers with a unique advantage in terms of cost stability. By entering into a long-term agreement with a renewable energy provider, businesses can lock a fixed or predictable price for the electricity they consume. By reducing exposure to market price risks of electricity, mid- and long-term business planning is improved giving stability and visibility for the future. Transitioning to clean energy also protects against the uncertainties associated with emission allowance price developments.
Meeting sustainability goals:
For businesses committed to sustainability, PPAs offer a direct path to lower emissions. These agreements facilitate the purchase of electricity generated from clean and renewable sources, helping companies reduce their carbon footprint and contribute to a more sustainable future. By signing a PPA for electricity from one of our wind parks together with the related guarantees of origin, customers can contribute to the energy transition and reduce their carbon emissions. Guarantees of origin are required when making claims of renewable or CO2-free power usage.
Long-term partnerships and energy security:
PPAs foster long-term relationships between energy providers and customers, spanning over several years. This not only ensures a stable energy supply but also promotes collaboration in addressing evolving energy needs and technological advancements. As your energy partner, Fortum works together with you to adapt to changing market dynamics and optimise your energy solutions.
Partnering with Fortum for reliable and flexible PPA contracts
Decarbonisation is a joint effort – together, we can define your business’ long-term energy needs and identify the best clean energy solutions.
Collaborations with esteemed customers like Hydro Energi and Borealis showcase our commitment to working together and actively contributing to decarbonizing the region's energy intensive-industries.
As Fortum’s partners, our customers can benefit from a multitude of advantages:
Tailored contracts to meet your company’s needs:
As a leading energy provider, Fortum offers unique benefits through our PPA contracts. We tailor our contracts to meet the specific needs of our clients, providing flexibility in choosing the origin and duration of the contract. Our offerings extend to both existing power generation and new investments, with various profiles including pay-as-produced for wind and solar, and annual and monthly baseloads for hydro- and nuclear power.
Diverse energy portfolio:
Fortum’s power generation portfolio offers an optimal mix of clean energy. We provide fossil-free electricity from our existing power plants in Finland, Sweden and Norway, with a physical presence in many of the price areas in the Nordics.
Expertise, reliability and scale:
Fortum brings a wealth of experience as a project developer and operator. With top-of-class operations and decades of experience in clean energy solutions, we provide reliable, clean energy at the scale you need. Our core operations in the Nordics focus on carbon-free power generation with 24/7 demand-matching possibility and stable grids.
Comprehensive energy services:
Our commitment extends beyond mere power supply to encompass a diverse range of electricity-related services throughout the value chain. Services include electricity hedging and trading, demand response solutions, as well as Guarantees of Origin (GO). We drive decarbonisation and clean energy demand growth in Nordic industries. We offer clean and stable energy supply for our customers' decarbonisation needs and actively develop projects in close partnership with them.
Customer-centric approach:
Fortum’s customer-centric approach prioritises collaboration and understanding the unique energy needs of businesses. We work closely with our partners to design customised solutions, ensuring a seamless transition to fossil-free energy sources.
Conclusion
Power Purchase Agreements offer a compelling avenue for businesses looking for a reliable, clean energy supply and long-term price certainty. By choosing Fortum as your partner, you not only gain access to a diverse and flexible clean energy portfolio but also align your company with a leader committed to a carbon-neutral future. Together, businesses and Fortum can drive the transition towards a cleaner energy landscape, creating a positive impact on the planet and future generations.
If you wish to discuss your company’s clean energy solutions further, don’t hesitate to contact us
Rikard Dagerbäck
Sales Manager, Scandinavia
Tel: +46 73 758 2872
rikard [dot] dagerback [at] fortum [dot] com
Hassan El Mahdi
Sales Manager, Sweden
Tel: +46 70 859 3503
hassan [dot] el [dot] mahdi [at] fortum [dot] com