noviembre 30, 2021

Volume Firming Agreement Ppa

The ECA includes a Volume Confirmation Agreement (VFA) that transforms the intermittent supply of renewable energy into a 24-fold 7-fold fixed power supply solution tailored to Microsoft`s energy needs. The software giant has developed, in collaboration with insurance and risk specialists, a new type of contract, called Volume Firming Agreement (VFA), which it encourages companies to purchase in association with specially structured PPAs. Microsoft itself uses VFAs to insulate its company from the complex task of managing price fluctuations and operational risks related to hiccups due to bad weather and the intermittent nature of solar and wind generation. We want continued growth in renewable energy. It is necessary to simplify this complex process and reduce the risk borne by the buyer. Signing a power purchase agreement (AAE) can reduce financial risks for buyers and sellers. But renewable energy projects have their own complex risk profile. No ECA can eliminate all of these potential risks and much of a ECA focuses on who assumes what risks. There are a number of options for managing the stock of risk. But with the growth of the ECA market for companies, the time has come to implement new innovative insurance and risk coverage products, in order to continue the green energy transition. Groups such as Google, Amazon, Apple and Facebook use power purchase agreements to buy wind and solar power that provide fixed prices for renewables. However, renewable energy generation varies depending on weather conditions, and ECA holders sometimes have to buy renewable MW from electricity markets at higher or lower prices than in their PPAs. .

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