MADRID - 23 May 2023 - LevelTen Energy, operator of the world’s largest PPA marketplace, today launched PPA Auctions, a faster way to contract power purchase agreements (PPAs). LevelTen’s PPA Auctions are a response to the industry’s need for new solutions that can keep up with today’s market conditions, including surging demand for PPAs. PPAs take 12 months to execute on average, and every week increases the chance of deal failure. In fact, 20% of PPAs under negotiation failed in 2022, according to a LevelTen survey of European developers. LevelTen’s PPA Auctions shave off months from average contracting timelines by streamlining the process. Furthermore, PPA Auctions are designed to increase the certainty of deal success while delivering advantages to both the seller and buyer.
How it Works
LevelTen facilitates PPA Auctions by bringing together reputable developers and experienced buyers that are equally motivated to get deals done. How it works:
- Developers initiate a PPA Auction by engaging LevelTen to review their project and jointly outlining desired PPA terms that accurately reflect current market conditions, including volume and contract structure.
- LevelTen markets the PPA to its extensive buyer network, which includes the largest corporations, more than 45 energy advisors representing hundreds of buyers, and energy resellers. Developers can also invite their network of buyers to participate. Gathering experienced and motivated buyers around a high-quality project creates the ideal conditions for developers to receive competitive bids.
- Buyers participate by submitting a notice of interest, reviewing the PPA terms, and submitting a bid along with critical details, including their credit rating and PPA experience. Once a bid is selected, both parties can confidently move forward to finalize the deal.
Benefits for Sellers and Buyers, and the Energy Transition
PPA Auctions enable developers to quickly secure an optimal buyer and an attractive PPA price for their projects – typically those with advanced project maturity. And, PPA Auctions provide experienced buyers who are ready to transact with a faster way to achieve their decarbonization targets, many of which have quickly approaching deadlines. Moreover, buyers can access the market’s best PPAs – the ones most likely to achieve commercial operation, on time.
“We asked developers about the top reasons behind deal failure, and nearly 30% cited disagreements on price, and almost 15% cited disagreements on contract terms,” said Flemming Sørensen, Vice President, Europe at LevelTen Energy. “LevelTen’s PPA Auctions address these pain points by bringing motivated and well-prepared buyers and sellers together, which ensures a more advanced starting point for final negotiations and reduces friction towards getting the deal done. LevelTen has piloted several PPA Auctions that have yielded attractive bids, and shortened the time it takes to arrive at term sheet negotiations. We need to keep innovating on PPA solutions because corporate PPAs are a significant source of new clean energy capacity. Last year, European corporations contracted 6.6GW, the equivalent of 11% of new solar and wind capacity additions. Speeding up PPAs helps us accelerate the energy transition.”
Learn more about PPA Auctions from LevelTen’s team at E-world in Essen, Germany from May 23-25 at at Stand 1-320. Or contact: firstname.lastname@example.org.
About LevelTen Energy
LevelTen Energy is the world’s largest hub for renewable energy buyers, sellers, advisors, asset owners and financiers. LevelTen’s platform includes the LevelTen Energy Marketplace, which delivers access to more than 4,500 power purchase agreement price offers spanning 28 countries in North America and Europe. Learn more at LevelTenEnergy.com and follow us on LinkedIn.