Chart of the week | Corporate PPAs: please form an orderly queue

With the promise of long-term fixed price agreements with creditworthy consumers, corporate power purchase agreements (CPPAs) have become one of the most talked about routes to market for new subsidy-free generators. CPPAs provide for the sale of electricity from a developer to a final consumer typically using a supplier to interface with market trading rules. Many large consumers are interested in them as a way of decarbonising their power supplies and in aiding budget certainty.

Recent announcements from developers such as Lightsource and EnergieKontor show that subsidy-free CPPAs can be delivered, but the scale of this model on a market-wide level is still being evaluated. This week’s Chart of the Week shines a light on this potential for increasing CPPA uptake by looking at the demand and supply balance.

James Brabben

James Brabben

To keep reading, please log in to your account

Log in
Contact us

Related thinking

Energy storage and flexibility

Out with the old, in with the new: T-4 Capacity Market clears at record price

On 21 February, the T-4 Capacity Market auction for Delivery Year 2026-27 cleared at a record high price of £63.00/kW/year, procuring 43,000.955MW of capacity. In this week’s 'Chart of the week', we explore the key takeaways from the auction.

Commercial and market outlook

Australia’s hydrogen success is tied to energy market policies

According to South Australia’s Hydrogen Power Plant study, the global demand for hydrogen is projected to reach 650 megatons in 2050, with a potential export market of $300b per year. In this market, Australia is well placed for renewable hydrogen production with a considerable penetration of variable renewable energy (VRE)....

Energy storage and flexibility

Christmas comes early for South Australian battery owners

The choice of Chart of the week was an easy one following Saturday’s storms that ‘reined’ down on South Australia. The state became isolated from the rest of the National Electricity Market after one of ElectraNet’s pylons, supporting the interconnector between SA and Victoria, was knocked down[1].   The consequence...

Energy storage and flexibility

State of Storage: Investigating battery profit for NEM states

It has been an interesting year for Australian energy markets, facing unprecedentedly high energy prices, coal outages, and market suspension. In today’s Chart of the week, we will investigate the impact a BESS would have made during FY 2022. Using Cornwall Insight Australia’s battery simulation model, we simulated a stand-alone...

Power and gas networks

The Quest of the Ring: Will the Sydney Ring of Power unlock commercial viability of renewables?

With the development of Renewable Energy Zones (REZs), the need for transmission augmentation arises to unlock the transfer of energy from Renewable Energy Zones to major load centres. This may subsequently increase the commercial viability of renewable generators within the Renewable Energy Zones, for example, by reducing plants’ technical curtailments...

Commercial and market outlook

Renewables share steadily increasing in European heating and cooling

In this week’s ‘Chart of the Week’, we look at statistics published by Eurostat, the statistical office of the EU, showing that the share of renewables in heating and cooling is steadily growing.

Energy storage and flexibility

Seasonal frequency in the NEM: is VRE continuing to drive it?

Frequency control remains a challenge for AEMO. New PFR (primary frequency response) provisions established in March 2020 will help AEMO to control frequency more efficiently. However, is it yet to be seen how market participants will be incentivised to participate in PFR market. In light of the rapid growth of...

Commercial and market outlook

Is the NEM going off schedule?

Is the NEM getting harder to control with rising variable renewable generation and distributed photovoltaic growth? AEMO’s balancing of scheduled supply is critical to ensure the system remains stable and wholesale prices work efficiently. This Chart of the week briefly examines if the NEM is “on schedule” to meet this...