The market for renewable PPAs in Spain

Situation, typology and future risks of the renewable PPAs market in Spain.

Last week, part of the Solarnub team we were able to follow the ATA Insights webinar on the market for renewable PPAs in Spain. All the current issues were discussed and we were able to clarify and resolve some doubt, we transferred the key points to you as a summary.


A PPA (Power Purchase Agreement) is an agreement or contract for the sale of energy between a generator and a buyer, usually for a long period of time. Buyers are energy marketers, who in turn will resell the energy purchased through the PPA to their final customers.


The Evolution of the markets of PPAs, depending on the nature of the Off Taker, we can group them in 4:

● PPA Public Auction

● PPA Marketer

● Industrial PPA

● Commercial PPA

Each one of the PPAs differ from each other, to a greater or lesser extent, from important criteria such as Guarantees, Credit Quality, Prices and Terms.


Based on its sales price methodology, three types of PPA can be distinguished:

● SWAP: Better leverage and reduces profitability.

● FLOOR: Improves profitability and worsens leverage.

● COLLAR: Optimizes the TIR vs. Leverage and Shared Up-side relationship.

Depending on the type of connection they have, direct assignment of the plant to the buyer (physical) or virtual connection through the electrical network (virtual)


● There is no need to nominate specific projects.

● Greater flexibility during the development of the projects.

● Price structures are more flexible.

● Settlements based on the needs of the project.


● The production of a specific project is contracted.

● Plant and buyer identification.

● Market representation.

● Settlements based on market needs.

● Pay as Produced.

Depending on which criterion the amount of energy contracted is calculated, three types of energy purchase agreement (PPA) can be distinguished


● Specific amount of energy evenly distributed at 8,760 hours of the year.

● Simpler structure and with greater liquidity.

● Exposure to the market apart from the Generator.



● All the energy produced by the plant or a specific% of the production of the plant is contracted.

● The off-taker assumes the risk in the production variations.

● Normally includes annual minimum commitments.



● Production curve simulated by the Offtaker according to the theoretical generation.

● Risk assumed by the generator. However, it is less than a base load.

● Less exposure to the market by the Generator.



The main medium and long-term risks of not moving towards a model of private PPAs could be:


Long-term exposure to market fluctuations may indicate that the price is below the bearable.


● The financing conditions for a pool project are more aggressive.

● Financing periods are shorter.

● The percentages of leverage are lower.

● The methods of dimensioning the debt are stricter.


● For the financing of projects without PPA, greater guarantees will be required.

● The guarantees are provided by the Generator and not by the Offtaker.


● Generation profile.

● Photovoltaic solar technology: 1.0495.

● Wind technology: 0.8521.

● Other Renewables: 0.9901.

An exciting world of PPAs … in continuous movement !. Here we leave you a ranking of the electricity companies in Spain.



It is the contact with the installers and the market, Bachelor science in Economics, MBA, Master in Renewable Energy, with more than 20 years of international experience in worldclass organizations. People skills, sales driven, always searching for opportunities and developing the business offline.


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