PPA intensive seminar: Valuation & contract design June

What is happening in the PPA market? Where are the potential opportunities and pitfalls?

The era of Power Purchase Agreements (PPAs) for wind and solar has begun. These long-term electricity supply contracts, often from emission-free energy sources, are changing electricity trading. Understanding how to value these contracts is becoming a basic need for utilities, investors, project developers, large consumers and banks. This course will show you how to value a PPA, which price components are taken into account when forming the "fair value" and which contract options influence the valuation.

This training course will teach you how to:

Classify and negotiate PPA prices

Link the elements of the electricity market to a marketing strategy for wind or solar power,

Compare the level of opportunities and risks of a PPA contract

Classify long-term electricity price influences

PPA seminar agenda

Session 1: PPA value chain overview

Overview of PPAs: types, volumes and market data

Motivations and roles along the PPA value chain: from plant operator to end consumer

Session 2: Basics of pricing and profile value in the electricity market

Recap: pricing mechanisms on spot and forward markets, as well as balancing group management

How to value a wind and solar profile

Session 3: Profile value and green property in practice

Case studies of profile value: sales revenues, values & quantities

Guarantees of Origin (GOs) as a source of revenue

Session 4: Methodology of assessing PPA structures and their risks

Evaluation of price and volume risks: example of weather impact

Evaluation of balancing costs: intraday balancing, imbalance energy, negative prices

Case studies: theory vs practice - pay-as-produce vs. pay-as-nominated vs. baseload PPA

Current PPA prices according to PPA price monitor

Session 5: PPA hedging for energy supply companies and plant operators

Value-neutral hedge with Base Parity Ratio (BPR): converting wind and solar into baseload

Liquidity of the forward market and rolling hedge

Remaining risks: implications for PPA structures and negotiations

Session 6: Recap of sessions 1 to 5 – understanding contract partners

Group exercise "Corporate": identifying the best PPA for you

Discussion about the “green” power – looking at examples including the RE100 and regulation for green hydrogen.

Session 7: Contract drafting (with external lawyer)

What regulatory requirements must a PPA cover? To what extent are there possibilities for drafting?

How should the bank’s needs be taken into account in the contract?

From the offer to the conclusion of the contract: practical tips for contract negotiations

Session 8: PPA market outlook to 2030

Looking into the future: German and European energy policy

Group exercise "market/regulation“: can PPAs become a mass business?

Session 9: Long-term electricity price development until 2050

Group exercise: electricity market trends & their impact on PPAs (for example CO2-pricing, storage, sector-coupling, short term trading)

Speakers

Huangluolun Zhou

Expert

Huangluolun Zhou studied industrial engineering (B. Sc. and M. Sc.) with focus on electrical power engineering at the RWTH Aachen University. In his master thesis, he dealt with sensitivity analyses of the flexibility of cogeneration and power-to-heat in the European energy market. He has also worked as a business analyst in a technology and management consulting company and is founder and energy market consultant of a software company for energy market simulations. Since May 2021, Huangluolun Zhou has been working at Energy Brainpool GmbH & Co. KG focusing on fundamental analysis. He works on analysis and consulting projects. He also regularly conducts trainings on the electricity and energy industry and is an expert in scenario development and storage technologies.

Target group

Specialists and managers from project developers, operators of renewable energy systems, energy suppliers, direct marketers and traders
Employees in the energy industry from the areas of energy trading, sales, purchasing, procurement, portfolio and risk management
Employees from politics, associations and media

Useful for “PPA beginners”

You are already a specialist in the energy industry and have had occasional contact with PPAs. Now, the topic is becoming more important for you. As a system operator, investor, energy supplier or industrial electricity consumer, you want to understand which steps are necessary to conclude a PPA and which approach is the right one for you. You still lack practical experience with PPAs, but strategic aspects also play a role for you. You are wondering how the PPA market will develop in the next few years and what influencing factors will shape it.