We assisted a global telco with evaluating, sourcing, and negotiating a cost-effective power purchase agreement (PPA) for one of its most renowned subsidiaries. We provided analysis of the UK electricity market to establish whether there was a business case, managed the entire procurement process, and advised our client on group energy strategy and data management.
Our UK market analysis demonstrated the business case for a PPA
Our analysis showed that a 10-year PPA would not only provide price visibility - attractive given the volatility in the futures markets - but also deliver significant savings over the lifetime of the agreement when compared to the average of electricity prices in the futures markets and UK government projections of electricity prices into the 2020s.
We guided our client through the complexities of PPAs
- As generated vs baseload power
- Transactional costs
- Historical market pricing
- Over-the-counter (OTC) pricing liquidity and visibility
- Independent long-term forecasts
- Contract term pricing options
- Fixed and indexed price escalation
- Price structure
And provided the following support throughout the process
- Requirements analysis, departmental briefing: risk allocation and opportunities
- Pre-screening of developers (>60 UK counterparts)
- Formulation of RFI documentation and go-to-market strategy
- Issuance to market tender and management of queries
- Formulation of evaluation criteria based on client's goals
- Quantitative and qualitative bid analysis of >100 projects across various RE technologies
- Internal stakeholder briefing packs; internal briefs on process, risks, evaluation and shortlisting of projects and developers
- Coordination and representation during face-to-face meetings and contract negotiations with short-listed developers
- Support and advice through final negotiations to Heads of Terms stage
