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PPA intensive seminar: Valuation & contract design

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

Register for PPA intensive seminar: Valuation & contract design

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

Josephine Steppat

Analyst

Josephine Steppat studierte Betriebswirtschaftslehre (B. Sc.), Volkswirtschaftslehre (B. Sc.)  und Environmental and Resource Economics (M. Sc.) an der Christian-Albrechts-Universität zu Kiel (CAU). In ihrer Masterthesis befasste sie sich mit den Auswirkungen des EEG auf den Day-Ahead Strommarkt und dessen Einfluss auf Power Purchase Agreements (PPAs). Seit Mai 2023 ist Josephine Steppat bei der Energy Brainpool GmbH & Co. KG im Bereich der fundamentalen Strommarktanalyse tätig. Dort arbeitet sie an Analyse- und Beratungsprojekten. Zudem arbeitet sie bei Energy Brainpool GmbH & Co. KG im Bereich der Power Purchase Agreements. Dort hat sie sich insbesondere auf die marktnahe Bewertung von Power Purchase Agreements spezialisiert und arbeitet an Beratungsprojekten mit. Außerdem führt sie regelmäßig Grundlagen- und Fachseminare zur Strom- und Energiewirtschaft durch.

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.