Services
Our New Energy provides a range of services such as PPA and strategic advisory to assist companies in successfully transitioning to a low-carbon environment.
*More info coming soon
PPA Advisory
What is a PPA?
A Power Purchase Agreement (PPA) is a contract between the producer of electricity (seller/generator) and the party intending to purchase electricity (buyer/offtaker). In this example, we have a developer who wants to build a renewable project in the form of a solar plant that generates electricity, and an offtaker – typically a utility, trader, or corporate offtaker – who wants to buy this electricity.
Through a PPA, the seller can enter a deal directly with the offtaker, instead of selling to the market daily at an uncertain price. The PPA specifies all commercial terms for the sale of electricity between the two parties. This includes the commercial starting date, pricing and payment terms, production capacity and schedule, penalties in case of breach, and conditions for termination. The PPA is typically signed for a duration of 5-20 years.
The main takeaway is that a PPA defines the revenue and creditworthiness of the project. This turns the PPA into a key instrument for project financing, thus leveraging returns for investors.
At Our New Energy, we understand that each PPA is unique, and as preferred advisors, we are here to help you throughout the process.
PPA benefits
Reduces LCOE
The increased stability introduced by the PPA reduces the return requirements, which in turn lowers the levelized cost of energy (LCOE).
Disruptive & Competitive
A PPA enables offtakers to purchase renewable electricity at a price that, in an increasing number of markets, can be lower than spot market prices in exchange for a long-term commitment.
Best of all: subsidy-free!
Until recently, investments in renewable energy projects were heavily dependent on subsidies. However, governments have been cutting back on subsidies due to high costs for consumers, which has dramatically reduced the number of new projects.
Our PPAs are self-supporting by design and do not rely on any aid from local governments. The cost to taxpayers is zero.
Why are PPAs important?
A PPA brings long-term predictability in a world of uncertainties to both the developer and the offtaker. By extension, this turns renewable energy projects into a great investment opportunity for the Investor. PPAs were the missing puzzle piece for a sustainable future.
Who is Our New Energy?
- Our New Energy is the most experienced PPA origination and advisory firm in the world, having closed +4.5GW of long-term fixed-price PPAs for unsubsidized projects.
- We understand both the financial and energy side of a deal, which allows us to facilitate efficient dialogues and break deadlocks.
- Our team of experts can advise you throughout the process and best defend your interests.
- Together, we create win-win PPAs that benefit you, other stakeholders, and, last but not least, the planet.
Our services along the PPA process
We have developed a workflow that has resulted in many successful PPA transactions. Speaking from experience, we know that all Power Purchase Agreements are different in one way or another, and that each client has specific requirements. Therefore, the lead time in each phase is an estimate and is largely driven by the parties involved as well as the market situation.
Structuring ----->
2-4 weeks
This is the most crucial phase, as it determines all subsequent phases and the likelihood of successfully closing a PPA. The aim of this stage is to find the optimal transaction structure for you, based on your motivating factors, perspective, and risk profile.
Origination ----->
1-2 months
Once the optimal PPA has been identified, we focus on finding interested offtakers based on the optimal structure criteria.
Our team will approach each of these offtakers to secure preliminary offers and term-sheets.
Negotiation ----->
2-3 months
We narrow the list of offtakers to proceed with negotiations. Our main task is to focus on the key value-adding points and ensure that local market nuances are properly addressed.
This phase concludes with the signing the PPA.
Closing ----->
0-3 months
Depending on the structure of the deal, there may be little to no work in this phase. Sometimes, however, financing partners or co-investors are introduced in this phase, where we help them properly assess the PPA and integrate it into the overall investment transaction for you.
The ONE star - connections between PPA actors
In order to successfully structure the business case in the market-parity space, it is of crucial to consider how all the moving parts are intertwined.
Based on our experience, we have defined the so-called ONE Star – a planning tool that, through a representation, shows the interests of the different parties involved in the transaction.
In order for the transaction to be successful, all interests must be aligned at deal closure.
Our Projects
2024
CIP x Google
Netherlands
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Technology Offshore
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Type 15 year fixed-price PPA
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Size 250 MW
2024
SVEA SOLAR x Ljusgårda
Sweden
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Technology Solar PV
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Type 10 year fixed-price PPA
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Size 8 MW
