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PPAs - Ready to make a long-term commitment to zero carbon?

Published on 14/12/20 at 04:24pm

As an industry that consumes a large amount of energy, the pressure is on for the pharmaceutical sector to achieve its sustainability goals as the deadline for net zero edges closer.

For those looking to accelerate their renewable energy goals, Power Purchase Agreements (PPA) are a viable option and will help pharma businesses match their long-term horizons.

There has been a recent surge in big pharmaceuticals committing to long-term solar and wind PPAs to support their journeys to achieve 100% renewable energy. The minimal investment and long-term gain of PPAs are a big draw. As banks and lenders become more accustomed to what they are lending for and the cost of renewable energy becomes significantly less expensive, now is the time to invest.

Benefits of PPAs

A PPA is a long-standing electricity supply agreement between your company and a renewable power producer, that requires no capital expense and limits your risk.

Power Purchase Agreements (PPAs) can be complex, and many businesses can be put off by the potential cost and long-term commitments, however, if you are willing to take the risk, the long-term benefits will outweigh the substantial commitment.

Investing in a PPA requires no upfront cost, and not only helps to meet your climate change targets but can help reduce energy expenses, diversify your energy supply, and provide long-term stability. It also demonstrates your commitment to the energy transition in response to investor and consumer demand for renewable energy.

Onsite v offsite PPAs

There are two types of PPAs. With an onsite PPA you can directly purchase renewable energy generated from your facility, such as solar or wind, and this acts as a hedge against rising electricity costs. There are no upfront costs and can also help towards reducing your Scope 2 emissions.

For those unable to accommodate onsite renewable energy, an alternative option is an offsite PPA. This allows you to purchase renewable energy from a renewable project developer who produces energy away from your facility. Again, there are no upfront costs, and it can act as a hedge against fluctuations in electricity costs.

Signing a PPA is a great way to access renewable energy at a reasonable cost, get ahead of your competitors and showcase your commitment to sustainability, and can bring long-term electricity cost stability and predictability.

For more information or to explore if a PPA is a viable option for your business, go to https://world-kinect.com/considering-power-purchase-agreement

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