How Power Purchase Agreements support the growth of renewables

Statkraft and Seagreen Wind Energy Ltd have concluded an agreement for a 1,075 MW wind farm project

A power purchase agreement is a contract between a producer (seller) and a consumer (buyer) of energy. It’s a win-win solution for maintaining and building renewable energy assets.

Generators of fluctuating renewable power need to ensure the profitability of the business. Renewable energy from wind and solar depends on natural conditions that vary widely. In addition, changes in supply and demand in wholesale energy markets are causing prices to fluctuate a lot.

Therefore, it can be difficult to predict the revenue from renewable production. However, renewable energy producers must ensure a consistent level of income to guarantee short- and long-term profitability for their plants, as banks and investors demand a certain level of income and planning security.

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