Locogen's Senior Asset Manager, Kayla Madlener, on the value of PPAs
From utility-scale solar and wind farms to single, sub 1MW turbines and community hydro schemes, securing the right power purchase agreement can dramatically alter the economics of any renewable energy project. Here, Kayla looks at some of the recent PPA deals our asset management team has secured for our clients.
Our asset management team helps our clients get the best returns from their renewable energy investment by deploying a systematic process of operating, monitoring, managing and maintaining their assets.
This comprehensive service includes performance analysis, maintenance co-ordination, operational administration, regulatory compliance and financial services.
Over the lifetime of a specific asset or portfolio, these services can significantly boost our clients’ returns but there is one area where those clients can realise immediate benefit.
Our Power Purchase Agreement (PPA) service ensures our asset management clients enjoy the best market rates for their generation. Even when the market is tight, there are gains to be made and our team works hard to bring those deals to our asset management clients. We work across technologies and scales and below are some recent examples where we’ve been able to secure better deals for our clients.
January PPA extract
- Hydro (100kW) January 2021 PPA Renewal – additional £7,072 annual revenue
- Wind (750kW turbine) January 2021 PPA Renewal – additional £16,815.92 annual revenue
- Wind (400kW turbine) January 2021 PPA Renewal – additional £27,712.94 annual revenue
- Wind (3.3MW portfolio) January 2021 PPA Renewal – additional £66,498.90 annual revenue
- Wind (1.5MW turbine) January 2021 PPA Renewal – additional £111,253.50 annual revenue
Clients with smaller assets often assume that only larger wind farms will benefit significantly from renegotiating PPAs. But, as can be seen from the sample of the PPA renewals above, our asset management team carried out in January, this is far from the case.
Clearly, there are deals to be had that can enhance financial returns at all scales but there is work to be done to achieve those results. Over the years, Locogen has developed the processes and expertise to secure the best deals for our clients, as Senior Asset Manager, Kayla Madlener explains:
“Getting the best deal is a combination of preparation, market knowledge and timing. The first step is to make sure we have all the relevant client asset details checked and uploaded to the power companies’ systems. That means we’re ready to generate an offer when experience tells us that the market is peaking. We then make sure we’re presenting like for like offers to our client. For example, quarterly payments as opposed to monthly payments can seriously impact cash flow for some of our clients.”
Choosing the best deal, however, is far from the end of the matter, as Kayla explains: “PPA renewal is more of a process than just a transaction. After we agree the deal with the client, we take care of all the paperwork and make sure that the change goes through seamlessly. We’ve heard from clients in the past who have used other platforms and been left in potentially difficult positions because they didn’t realise that they had to supply meter evidence or other administrative and/or financial details. We take care of everything so that all the client notices is the increased payments to their account.”
PPA renewables are a standard part of our asset management service, which delivers a wide range of benefits to our clients, which you can read about here.
Our asset management team also offers standalone PPA renewal as a standalone service. Contact us for a no-obligation quote.