As a leading electricity producer in Europe, Alpiq offers its customers in several European countries customised energy solutions and products. We support our industrial and business customers in optimally managing their energy needs and portfolios with individual solutions.

In the area of origination, we bring renewable energies to market and to our customers – for example, through long-term power purchase agreements (PPAs). These range from standard power contracts to customised green power deliveries with guarantees of origin. To manage risks associated with fluctuating renewable power generation, we also manage flexible generation assets for third parties. Our service offering includes: PPAs, long-term supply contracts, flow deals, physical balancing and other structured origination products. 

Our goal is to provide best-in-class services to renewable energy producers, industrial consumers, portfolio managers and retailers.  We do this in Switzerland, across the Scandinavian/Baltic market, France, Germany, Italy and Spain. We seek to thoroughly understand our customers' businesses and help them make their businesses a success. 

Alpiq is a leading provider of short- and long-term power purchase agreements (PPAs). In recent years, Alpiq has concluded several PPAs in the Scandinavian markets, for example. 

What are PPAs and what is the importance of such PPAs for Alpiq and our sustainable energy business? The questions go to Matti Ahtosalo, Head Northwest Europe in Alpiq’s Division International. 

Matti, what are PPAs and what role do they play? 
PPAs are “Power Purchase Agreements” used in the renewable energy business. PPAs are long-term contracts between a power producer and a power off-taker. They play a crucial role in the energy transition towards a carbon-neutral future. Such long-term solutions guarantee our client a carbon-free electricity supply and also facilitate the integration of renewable energy sources into the electricity market by guaranteeing the off-take. PPAs often lead to price stability and planning certainty for both parties, too. 

How does this work? 
Well, it’s actually quite easy. With these long-term contracts, which generally range from around 5 to 25 years – the producer can be sure that the energy produced finds an off-taker at the conditions agreed upon. Such contracts provide revenue certainty for the producer and therefore reduce financial risks. On the other hand, such long-term contracts help the off-taker to meet sustainability and environmental objectives by guaranteeing that they have a fully renewable electricity supply for the terms of the contract, which also leads to stability. One can say that the PPAs play a significant role in the growth of renewable energy projects. Without them, it would not have been possible to build a lot of wind farm projects, for example.

PPAs play an important role in the Nordics. Is this because there has not been the same subsidy scheme as in other regions? 
PPAs are not a form of financial subsidy or direct financial support from the government or other entities. Instead, they provide a market solution. They’re a market-based mechanism for renewable energy project developers to secure long-term revenue, which can, in turn, help these developers secure financing and make their projects financially viable. In the Nordics, PPAs are popular for wind farm projects, while in Spain the focus is more on photovoltaic projects. This is not surprising, as in the Nordics we have a lot of wind and in Spain there is a lot of sun to produce electricity.  

What is important for Alpiq as one party of the PPAs? 
Our purpose as a company is that we contribute with our sustainable energy business to a better climate and an improved security of supply. With the PPAs we do it on various levels. We support the other party - such as Borealis or Norsk Hydro in the latest contracts - on their journey to achieve the sustainability goals which very often relate to carbon-neutrality. In the meantime, Alpiq can improve its sustainable energy business. We can expand our renewable energy portfolio little by little, support the integration of renewable assets into the market with our powerful and flexible hydro power assets in Switzerland and hence contribute to an enhanced security of supply. We are acting as an enabler. For example, we ensure that green energy is supplied to our industrial customers to support their journey towards carbon-neutral production.