了解可再生能源协议：PPA和VPPA（英文版）-EnelX.pdf

Understanding PPAs and VPPAs How These Tools Work, and How to Evaluate the Economics of VPPAs Renewable Energy Agreements How to Evaluate the Financial and Environmental Implications of PPAs and VPPAs 2Understanding Renewable Energy Agreements | Enel X INTRODUCTION The Growing Demand for Renewable Energy and Power Purchase Agreements PART 1 Understanding PPA Contract Structures PART 2 Understanding VPPA Cash Flows PART 3 A Case Study in VPPA Selection PART 4 Best Practices in Soliciting Proposals CONCLUSION Key Takeaways for Assessing Value and Risk in PPAs and VPPAs Table of Contents 3 4 5 7 12 14 DISCLAIMER TRANSACTIONS IN OVER-THE-COUNTER DERIVATIVES (OR “SWAPS”) HAVE SIGNIFICANT RISKS, INCLUDING, BUT NOT LIMITED TO, SUBSTANTIAL RISK OF LOSS. YOU SHOULD REFRAIN FROM ENTERING INTO ANY SWAP TRANSACTION UNLESS YOU HAVE FULLY UNDERSTOOD THE TERMS AND RISKS OF THE TRANSACTION, INCLUDING THE EXTENT OF YOUR POTENTIAL RISK OF LOSS. FOR FURTHER INFORMATION ABOUT ENEL X NORTH AMERICA, PLEASE VISIT: GENERAL INFORMATION: www.enelx.com/n-a/en | LEGAL INFORMATION: www.enelx.com/n-a/en/legal-statements 3Understanding Renewable Energy Agreements | Enel X The Growing Demand for Renewable Energy and Power Purchase Agreements As the need to reduce emissions grows for both utility and corporate buyers, renewable energy power purchase agreements (PPAs) and the related virtual power purchase agreements (VPPAs) are becoming increasingly popular. For corporations, these are among the most powerful tools for reducing Scope 2 greenhouse gas (GHG) emissions. But increasing demand has created a more competitive landscape among PPA buyers, as data from Bloomberg NEF demonstrates. A record-breaking 20.1 gigawatts of renewable energy was contracted globally in 2019, up 40% from 2018. In 2020, despite the massive challenges posed by the coronavirus pandemic, that number rose again to 23.7 GW. And it’s not just about large PPAs for corporate giants and utilities—small and mid-sized PPAs have also expe- rienced sustained growth. PPAs under 100 MW doubled between 2017 and 2019, according to Bloomberg NEF data, and the trend is expected to continue in coming years as more and more organizations adopt increasingly ambitious sustainability goals and seek out new tools to reach them. PPAs—whether physical or virtual—are vital to meet sustainability targets. As an independent renewable energy advisor, Enel X has prepared this guide to: introduce readers to these two types of agreements; explain the RFP process for acquiring these agreements; and walk readers through a case study that introduces the basics of economic evaluations for VPPAs. INTRO 0 5 10 15 20 25 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Global Corporate PPA Volumes (GW) 2010-2020 Source: BloombergNEF GW 25 20 15 10 5 0 012 20019018 23.7 20.1 4Understanding Renewable Energy Agreements | Enel X Physical PPA Virtual PPA Energy Settlement Buyer receives and takes title to physical energy, responsible for coordinating delivery and scheduling None (strictly financial) Financial Settlement Buyer agrees to fixed price (including RECs) through supplier or directly to seller Contract-for-differences settled directly with seller Geographic Flexibility Limited to projects residing within regional grid footprint More flexibility – projects can reside within the US Project Linkage Strong – direct match of project production with customer facility usage Not as strong – no physical delivery Understanding PPA Contract Structures A power purchase agreement (PPA) is a contract between a buyer and seller of electricity. A PPA defines terms like price per megawatt hour (MWh) and penalties for underperformance while outlining the logistics of delivery and financial settlement. Historically, PPAs were typically tools for buyers like utilities and occasionally major energy users, but that has quickly changed in recent years as businesses and organizations of all industries have adopted the PPA structure. Renewable energy PPAs are typically structured in one of two ways: physical PPAs or virtual (sometimes known as financial) PPAs. With a physical PPA, the project must be located either on-site or within the same region of the buyer’s utility grid. The buyer contracts with a developer for purchase of physical power and associated renewable energy credits, also known as RECs, “a market-based instrument that represents the property rights to environmental, social and other non-power attributes of renewable energy generation.” RECs are used to prove renewable electricity use claims, and, as a market-based instrument, can be sold and exchanged in order to claim renewable energy use for carbon accounting. Virtual PPAs (also known as VPPAs, financial PPAs and synthetic PPAs) are a variation on the typical PPA structure, and are a rapidly growing tool in decreasing emissions. In the case of a virtual PPA, the buyer never receives the physical electricity generated by the project under contract—instead, the VPPA is purely a financial transaction, or a contract-for-differences, with the buyer exchanging a fixed-price cash flow for a variable-priced cash flow and the associated RECs. While both contract structures help buyers achieve significant emission reductions, there are differences in the geographic flexibility, accounting implications, and project linkage, as detailed in the chart below. PART 1 DeveloperBuyer RECs MWh Power Market A Power Market B DeveloperBuyer MWh RECs MWh 5Understanding Renewable Energy Agreements | Enel X $ Understanding VPPA Cash Flows Once a VPPA is signed, the buyer and developer must uphold their ends of the agreement. The chart below outlines the steps involved once the project is built and energy starts flowing into the grid, and this section elaborates on some of the more complex aspects of a VPPA. Energy price Electricity RECs VPPA contract Settlement PART 2 $ $ $ $ Energy Customer Renewable Energy Generator Electricity Market A Electricity Market B Renewable energy generator sells customer’s null power into wholesale market and receives market price $ . Generator receives fixed price for energy/RECs through settlement with customer, based on the VPPA contract terms . Generator and customer exchange settlement $ based on the difference between wholesale energy price and the fixed price outlined in VPPA contract. Customer purchases electricity from their local utility/electricity market as usual $ . 2 3 1 1 2 3 6Understanding Renewable Energy Agreements | Enel X REC Receipt and Retirement As part of the settlement transfer, the renewable energy certificates (RECs) are also transferred to the customer. The EPA defines a REC as a “market-based instrument that represents the property rights to the environmental, social and other non-power attributes of renewable electricity generation.” The value of the received RECs depends on the market the project is in and the type of RECs to be received by the buyer (either voluntary or compliance) 1 . Variation in REC value should be considered when evaluating the economics of a VPPA. Monthly Settlement VPPAs include a strike price—the price per MWh the buyer agrees to pay the project owner—which is marked against a specific wholesale market delivery point. The difference between these two prices is multiplied by the MW generated that month to get the monthly settlement value. The orange line on the graph represents a $35/MWh strike price for a VPPA. (Please note that this number is strictly for example purposes; strike prices vary widely from project to project based on a variety of factors.) VPPAs often settle against hourly grid power prices— when those prices are above the strike price, the seller credits the buyer. When the prices are below the strike price, the buyer must pay the seller. These payments represent the financial settlement of VPPAs, which generally occur monthly. Seller credits buyer when real time power settles above strike price. Example: › Strike price: $35/MWh › Real time: $40/MWh (market) › Seller credits buyer $5/MWh $35/MWh strike price Seller debits buyer when real time power settles below strike price. Example: › Strike price: $35/MWh › Real time: $30/MWh (market) › Seller debits buyer $5/MWh 1 The compliance REC market is created as a result of legislation like renewable portfolio standards (RPS) in certain regions; compliance RECs are often more expensive because they have stricter criteria attached to them. In contrast, the voluntary REC market is typically for corporations or individuals looking to achieve sustainability goals beyond RPS mandates. Settlement = ( Wholesale rate – Strike price ) x MW Example Contract for Differences (CFD) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 7Understanding Renewable Energy Agreements | Enel X OR Sites 23k MWh/yr CA Sites 68k MWh/yr CO Sites 8k MWh/yr MI Sites 22k MWh/yr NC Sites 15k MWh/yr NY Sites 4k MWh/yr ERCOT North Load Zone IL Sites 87k MWh/yr A Case Study in VPPA Selection An anonymized case study of a recent customer solicitation can help to illustrate the decision-making process and forecasting involved in a VPPA. The customer has sites across seven states in multiple wholesale energy markets. To significantly reduce Scope 2 emissions within the US, they decided to pool their annual US-based electric load of approximately 227,000 MWh per year, and seek a VPPA that could effectively match all of their US-based electricity consumption. (Note that none of that 227,000 MWh was previously covered by utility green tariff or other forms of renew- able energy supply agreements.) The customer explored a variety of different project options for their VPPA. One of these options was in ERCOT North Load Zone—in this section, we will discuss a simplified version of the forward market assessment we conducted in analyzing this choice economically. The Importance of ESG Considerations This case study specifically focuses on economic assessment of projects, but it’s crucial to note that there are a variety of important factors beyond just price that customers consider in choosing a VPPA. Many place priority on project execution risk or the reputation of the owner/operator, and one particular area of increasing concern is ESG (environmental, social and governance). Many energy projects are now judged on more than just price—projects could face added scrutiny from stakeholders if they don’t include and place emphasis on ESG considerations like minimizing environmental disturbance, carbon impact of technology involved, or emphasizing diversity. Customers committed to ESG may also prefer to choose projects that aren’t the lowest priced option if they integrate environmental stewardship into the way they are built and run, or support the economic and social development of communities where they operate. In Part 4 we discuss factors involved in the RFP process; for businesses that have strong ESG preferences, it’s crucial that these factors be integrated into that process. Businesses should discuss ESG concerns early in the process, and include qualitative considerations within scoring and evaluation models, not just quantitative. Otherwise, if the RFP gives no considerations beyond price, developers will not pitch on other benefits and those developers placing significant attention on ESG impacts may be dissuaded from participating. If a project is chosen solely on price, this may often lead to a customer selecting a project that is not right for their needs. PART 3 8Understanding Renewable Energy Agreements | Enel X NPV, Forecasting Cash Flows and Comparing Projects In this case study example, the ERCOT North Load Zone project’s strike price was $21.29/MWh, but the strike price of a project is not sufficient to understand a project’s true value. Instead, a project’s net present value (NPV) is used to evaluate potential agreements by calculating the present value of a PPA’s expected cash flows. Calculating NPV involves a wide variety of forecasting for both regional energy prices and REC prices, as well as qualitative considerations around the timing of the project, the type of RECs produced, the location- specific dynamics, and more. And looking beyond NPV, customers must carefully assess the risks involved in taking on a long-term price hedge within a particular region. To get a better understanding, this case study demonstrates some of the forecasting involved in this customer’s process. Forward market assessments are used to forecast month- ly settlement values by estimating wholesale energy costs at the project’s delivery point. For example, the chart below shows three different forward pricing scenarios, based on different possible paths that future prices might take in the ERCOT North Load Zone. These three projec- tions are working under three different assumptions: The “baseline” projection is built on the assumption that this region will successfully reduce the generation scarcity that leads to high summer prices. The “high-price” projection shows the potential impact of the continuation of multiple bullish pricing trends. The “low-price” projection is even more conservative than baseline, using average historical prices (2015- 2020) as the basis for projections, adding weight to weaker years. This low-price forecast is intended as a worst-case scenario—remember that in the VPPA, buyers are credited when prices are above the strike price, and must pay when it is below the strike price. Forward Market Pricing Assessment | ERCOT North Load Zone 9Understanding Renewable Energy Agreements | Enel X Project Developer Project Name Project Term (Years) COD Year Strike Price ($/MWh) Settlement Point Tech Nameplate Capacity (MW) Bid Capacity (MW) PV REC Rank Solar Developer 22 Greenfield Solar 12 2024 $21.29 ERCOT North Load Zone Solar 200 100 $9.25 1 Solar Developer 13 Rocky Hill Solar 10 2023 $20.25 ERCOT North Hub Solar 75 75 $8.56 2 Solar Developer 5 Lone Solar 12 2024 $22.25 ERCOT North Load Zone Solar 250 50 $7.98 3 Solar Developer 5 Green Lake Solar 12 2024 $22.68 ERCOT North Load Zone Solar 100 100 $7.25 4 Solar Developer 18 Crater Solar 12 2023 $22.87 ERCOT North Load Zone Solar 50 50 $7.15 5 Solar Developer 5 Clearview Solar 15 2023 $20.98 ERCOT North Hub Solar 125 125 $6.20 6 Solar Developer 3 Skyway Solar 15 2023 $26.02 ERCOT North Load Zone Solar + Storage 150 75 $6.12 7 Solar Developer 9 Mountain Pass 2 15 2024 $21.23 ERCOT North Hub Solar 100 100 $5.99 8 Solar Developer 10 Valley Field Solar 12 2023 $21.85 ERCOT North Hub Solar 150 50 $5.87 9 Solar Developer 27 Creekview Solar 1 10 2024 $23.80 ERCOT North Hub Solar 75 25 $5.45 10 Solar Developer 12 Fountain Isle Solar 12 2024 $26.55 ERCOT North Load Zone Solar + Storage 50 50 $4.15 11 Solar Developer 17 Green Pastures 1 10 2023 $27.87 ERCOT North Load Zone Solar 100 100 $4.05 12 Solar Developer 3 El Dorado Solar 10 2023 $25.98 ERCOT North Hub Solar 100 100 $3.98 13 Us