Samuel M. Lopez Hernandez

Senior Originator (Spain)

Samuel M. Lopez Hernandez

What do you think are the challenges facing renewable portfolio owners today and how can EDF Trading help?

With the end of the feed in tariffs regimes in many countries and the increased competition in governments renewables auctions, developers need to access the wholesale markets to secure a fixed revenue stream for their projects.

What are the different types of PPAs?

We have developed a large number of structures which include:

  • Baseload PPA: Where EDFT purchases from the developer the same amount of energy for every hour during the tenor of the deal. The developer bears the volume risk and the baseload profile vs. actual production profile risk.
  • Fixed shape solar/wind PPA: The developer shares with EDFT the hourly shape of energy it commits to sell for the tenor of the deal. The developer bears the volume risk and the hedge profile vs. actual production profile risk.
  • Pay as produced PPA: EDFT purchases all the output of the renewable plant. EDFT bears the volume risk.
  • Floors: EDFT sells a put option to the developer. The developer secures a minimum price for its output and benefits from the potential upside if energy prices rise.
  • Collars: The nature of the deal is quite similar to a Floor. In the Collar structure the developer buys a put option and sells a call option (with a higher strike price than the put option) in order to reduce the initial cost of the transaction.
  • Hybrid PPAs: EDFT buys either baseload, shaped or pay as produced volumes from the developer for the front end of the curve. For the back end, where liquidity is lacking, EDFT sells a floor structure to the developer.