green ppa
Deep Hedging of Green PPAs in Electricity Markets
Biegler-König, Richard, Oeltz, Daniel
The transition of the electricity production from fossil fuels to renewable sources is one of the most important tasks of the present and future. State financed feed-in tariffs have helped to kick-off this transition. Today though, the production from renewable sources is more and more brought to liberalised electricity markets using so-called Green Power Purchase Agreements (PPA). PPAs are contracts that sell the production of a generating asset at a fixed price. PPAs are not new, they have helped to secure the large investment sums needed when building conventional power plants for decades. This is achieved by guaranteeing a secure stream of income to the owner of the asset. At the same time the buyer is exposed to market risk. A PPA is called "Green" when its underlying generating asset uses a renewable source. Due to the fact that electricity is not storable its production has to match consumption at every point in time.
- Research Report (0.50)
- Press Release (0.46)
- Energy > Renewable (1.00)
- Energy > Power Industry (1.00)