The duration of the contract does not exceed 18 to 24 months, as the financial options for electricity are currently illiquid beyond this period. In the case of a financial AAE, the contract volume is traded on the market through an OSIS and complies with the OSIS credit requirement. Electricity purchase contracts come in many forms. You may have heard of physical and virtual PPAs. In fact, there are other forms. But for this introduction, we will focus on these two. An AEA may cover an existing asset that was previously under a feed-in tariff (government subsidy). An AAE can also replace an expired contract. However, AAEs are complex in their structure and pricing. The absence or absence of negotiation of a contractual clause may affect the total revenue of an AEA project. This requires a thorough understanding of energy risks, assessment and negotiation issues. The contract can determine facility losses (for example.
B for maintenance work) and provide penalties for unforeseen failures. Negative prices are a growing problem for renewable energy. It is therefore essential to understand the market in which we operate and to know how these negative prices are treated. There may be clauses in the contract that require the asset to cease production at longer negative prices. This is an important and often overlooked position in a PPP contract. In order to reduce price and counterparty risk and guarantee long-term cash flows, EEX offers cash futures contracts up to 6 years in advance in all major European electricity markets. In order to allow members to cover a greater part of their AAE risk, EEX is currently reviewing the list of other calendar editions. Profile risk arises from the fluctuating nature of renewable energy (for example.B. does not produce solar energy at night). In markets with high penetration of renewable energy, periods of high production can lead to a significant decrease in the price of electricity, i.e.
turnover. AAEs are long-term contracts between a party that produces and sells electricity and a party that buys electricity. These are specific agreements under which electricity exchanged between the two parties comes from renewable energy sources and a company buys electricity to cover its energy needs. Do you have a basic master`s contract based on the European Federation of Energy Traders (EFET) or an ISDA (International Swaps and Derivatives Association)? If so, an appointment sheet is usually sufficient, since the underlying contract has already been negotiated between the parties involved. The contract usually defines the power plant or group of power plants that provides the electricity.