How Power Purchase Agreements (PPAs) Help Businesses Achieve Sustainability Goals

Sustainability is no longer a nice to have but a critical component of business strategies. For organisations aiming to reduce their environmental impact and embrace clean energy, renewable energy Power Purchase Agreements (PPAs) offer a transformative solution to achieve these goals. By enabling access to renewable energy sources these PPAs allow businesses to achieve their sustainability targets, energy security goals and cost savings.

What Are PPAs?

A PPA is a contractual arrangement between a business and an energy provider to buy and sell power. PPAs can provide businesses with price certainty, energy independence, and the opportunity to meet sustainability goals through a reliable source of green energy.

Typical renewable energy PPAs include private wire PPAs, where energy is supplied directly from a renewable energy source to the business, and virtual PPAs, which offset electricity consumption from grid with renewable energy generation elsewhere on the grid.

Here are the key benefits of PPAs for business sustainability:

1. Reducing Carbon Footprint By sourcing electricity from renewable energy projects, renewable PPAs enable businesses to significantly cut greenhouse gas emissions. This makes a direct contribution to global efforts against climate change and helps businesses align with their Environmental, Social, and Governance (ESG) targets.
2. Price Protection and Savings PPAs often feature fixed pricing, allowing businesses to hedge against energy price volatility. Private wire PPAs also eliminate third-party grid transmission costs, reducing overall energy expenses.
3. Energy Independence and Security Private wire PPAs provide a dedicated energy source, reducing dependency on the grid. This ensures greater fortitude against outages, infrastructure failures, or curtailments - contributing to security of operations.
4. Regulatory and Brand Advantages Choosing a renewable PPA demonstrates a commitment to sustainability, strengthening your business reputation and ensuring compliance with evolving environmental regulations. Certification schemes like Renewable Energy Guarantees of Origin (REGO) offer a recognised means of evidencing an investment in sustainability.

Supporting Broader Sustainability Goals

Renewable PPAs not only provide clean energy but also help businesses integrate sustainable practices across operations. Here’s how:

• Improved Energy Efficiency: Combining a renewable PPA with investments in energy-efficient technologies maximises the benefits of renewable energy.
• Stakeholder Engagement: Demonstrating environmental responsibility builds trust with customers, investors, and regulatory bodies.
• Supply Chain Sustainability: Businesses can encourage partners to adopt renewable energy solutions, multiplying the impact across the value chain.

Key Considerations When Choosing a PPA

To maximise the sustainability and financial benefits of a PPA, businesses should consider:

• Contract Length: While private wire PPAs typically last 10–25 years, shorter virtual PPAs offer greater flexibility while foregoing some of the wider benefits of a private connection). Businesses can tailor contracts to match their sustainability goals and operational needs.
• Energy Demand: PPAs can be designed to cover a specific percentage of energy needs, complementing other renewable or energy efficiency initiatives.
• Asset Ownership: Some agreements allow for asset transfer at the end of the term, offering long-term energy independence.

Taking the Next Step Towards Sustainability with renewable PPAs

For businesses looking to enhance their sustainability strategy, renewable PPAs provide a proven pathway to achieving clean energy goals. By partnering with renewable energy providers like Balance Power, companies can not only secure reliable, low-carbon energy but also demonstrate leadership in environmental responsibility.

Contact Balance Power today at enquiries@balancepower.co.uk to explore your tailored PPA solution and take a step closer to your sustainability objectives.