The electricity trader is the party that purchases the quantities produced by the solar plant. It could be a retailer, an institution using electricity for personal use (e.g. a school, hospital, government, etc.) or a large corporation aiming to reduce its carbon footprint at the most affordable cost. The duration of the agreement is usually 2 years on average, but can go up to 20 years, providing secure revenue for the generator and a promised amount of electricity to the buyer. On the other hand, РРА agreements are a prerequisite for attracting project financing during project construction.
The type of PPA agreement is determined by the electricity buyer and can be:
– Commercial PPA – the buyer is a type of institution (school, hospital, government, etc.) aiming to use the electricity for its own needs, purchasing it directly from the producer.
– Merchant PPA – the buyer is a merchant seeking to resell the purchased electricity. The only condition in a commercial PPA is that the producer and the end-user are market participants.
– Corporate PPA – one of the most common types of PPA. The buyer is a large corporate player aiming to achieve its green energy goals. More and more large companies are entering into PPAs to reduce their carbon footprint, such as Google, Apple, Amazon, etc.
Corporate power purchase agreements of electricity produced from renewable energy sources are not yet widely used in Bulgaria, as most of the producers are also consumers of their own capacities. Typically, these agreements are concluded for large renewable energy projects on the basis of project financing, providing the necessary electricity for large (usually international) companies that necessarily supply themselves with green electricity“.