Sleeved Power Purchase Agreements
What is a sleeved Power Purchase Agreement (PPA)?
A PPA is a contract signed directly between a business and an electricity generator. The buyer of a PPA typically agrees to purchase electricity corresponding to a percentage of the output of a generator at a fixed price, in return for receiving the floating spot price. PPAs often allow the businesses that buy them to access electricity at lower costs than the market can provide and for longer periods of time.
When businesses sign a PPA directly, without the integration of a retail contract, they also assume the responsibility of managing accounting for the contract, which can expose them to accounting risks and regular validations. This is why more businesses are choosing to sleeve their direct PPAs.
A sleeved PPA involves a third party in the management of the agreement – typically an electricity retailer. The electricity retailer may be involved at the time of purchase, or appointed during the contracted period, to help navigate the complexities of the agreement, manage the account on behalf of the business and reduce unhedged risks.
Should your business be sleeving its PPA?
For large businesses, a direct Power Purchase Agreement (PPA) can be an appealing and cost-effective way to help manage energy costs and connect the business with renewable energy generation – but going direct to the generator doesn’t come without risk and complexities.
For businesses unfamiliar with the process, purchasing and managing a direct PPA can be time-consuming and ultimately affect your bottom line. In this instance, opting for a PPA integrated with a retail contract can be advantageous, leaving the complicated accounting and management in the hands of energy specialists.
But, how can your business mitigate the challenges of a PPA if it’s already locked into a long-term direct agreement?
Engage Australia’s Power Purchase Agreement specialists
Flow Power has established itself as one of the industry’s leading providers of PPA sleeving solutions, empowering Australian businesses with new and better ways to access renewable energy.
For businesses with an existing direct PPA, sleeving it with Flow Power can simplify the experience.
Our team of experts will assist with a bespoke solution, integrating your PPA into a retail contract, simplifying your business electricity strategy and reducing the burden of energy accounting on your business.
The benefits of sleeving your Power Purchase Agreement with Flow Power
Flow Power’s account managers take care of PPAs on behalf of some of Australia’s largest and best-known businesses and organisations.
Our expert team can provide a bespoke solution, passing through the cost and sustainability benefits of a PPA, while removing the associated complex hedge accounting practices.
Make the switch to simplified, integrated billing and let our expert team help you utilise your PPA to take control of your energy procurement.
Backed by the insights of our Trading and Analytics team, we can navigate cash flow risks and assist in achieving optimal energy and pricing outcomes, helping you get more from your contract.
Flow Power’s sleeving solution links your PPA to a wholesale energy supply agreement, rather than having a standard fixed price contract that operates in isolation.
This integrates the two contracts into one, reducing price exposure risk and fluctuations that can occur when a standalone PPA is separated from a retail contract.
Flow Power’s smart technology offers access to your accurate, real-time energy data, via kWatch hardware installed on your site.
Access to this data helps our in-house engineering team match your PPA to your load profile, optimising price and energy efficiency.
Whether you have an existing PPA you’re looking to sleeve, or you’re seeking a new contract, we’re here to help.
Get in touch via the link below and we’ll connect you to an energy specialist.