What’s useful about short-term PPAs is that they provide far more breathing room for both enterprises and energy suppliers worried about market fluctuations.
For example, if renewable technology prices begin to soar, the two parties can renegotiate terms in the near future to better reflect current trends.
Short-term PPAs also allow smaller firms to comply with sustainability policies, as they don’t have to commit to a long-term arrangement in a growing market. Moreover, short-term PPAs give rise to additional renewable energy capacity worldwide, equating to more enterprise options. While utilities may lose out on long-term stability, the upside of short-term PPAs is that they can modify terms to take advantage of higher energy demands. Furthermore, short-term contracts eliminate the need to allocate energy capacity at the start of a project, instead allowing for application at any stage of a project.
Ultimately, short-term PPAs are all about sharing risk between the enterprise and the energy supplier. They allow firms to step back and reevaluate an energy procurement contract and projects before deciding how to proceed.It’s no secret that there’s a united effort to curb carbon emissions, with governments encouraging enterprises to leverage various sustainable technologies.
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