Virtual PPA: an Accelerator for Companies' Net Zero Targets

A Solution to Power Business Operations from Anywhere

A Virtual PPA is a flexible, customisable, multi-year, bilateral, and renewable energy contract powered by renewable energy produced by Enel Green Power. It does not involve the physical delivery of energy from the supplier to the customer, who therefore does not need to change supplier. It is essentially a financial transaction, which is why this type of agreement is often referred to as a “financial PPA”. Virtual PPAs operate in the form of contracts for difference (CFDs), whereby the energy supplier and the customer agree on a price for the electricity to be supplied (the “strike price”). If this price is lower than the price determined on the wholesale electricity market; the customer receives an amount from the supplier equal to the difference between the operating price and the wholesale market price. Conversely, if the PPA price is higher than the wholesale market price, the customer compensates the supplier for the difference. Being long-term, these agreements protect companies from volatile energy markets and facilitate access to renewable energy supplies. Furthermore, they are ideal for customers who need to supply several separate locations, as no specific supply points are involved.

Since our power plants are not directly connected to the customer's power supplier, these contracts do not include any dispatching costs. Companies that subscribe to VPPAs also receive Energy Attribute Certificates (EACs), which certify that the energy purchased comes from renewable sources.