What is a PPA and why do they matter in the renewable energy transition?
Power Purchase Agreements (PPAs) are some of the quiet heroes of the clean energy transition. They turn good intentions and great ideas into real life wind farms, solar parks hydro sites and bio generators, and enable hundreds of thousands of GWh of green electricity to be generated.
In this article we’ll explain what a PPA is, what makes Good Energy’s approach different, and why they matter so much for the transition to clean power.
Author, Kate Ryder, leads the renewable energy origination team at Good Energy, where she drives bold and innovative contracting that supports the growth of UK renewables. Her team works directly with generators and developers to structure funding and long-term power purchase agreements (PPAs) for both new and existing renewable projects.
What is a power purchase agreement (PPA)?
When it comes to owning a renewable energy project, there are two key aims – generate as much renewable power as possible and sell that power for the best price at any given time. This works for the good of the planet, and for the good of your bank balance.
At Good Energy, we buy the power from your renewable energy project for the fairest price we can. We do this through a contract called a Power Purchase Agreement (PPA).
Ultimately, a PPA is a contract between Good Energy and the owner of a renewable energy project, where we commit to buying your power, normally for a fixed price per MWh for 6–36 months.
Our most popular PPA offering is our 12-month fixed £/MWh contract. This gives the renewable project owner the flexibility and option to reprice for their power after a year.
It’s a bit like a coffee shop signing a contract with the office next door for 100 daily coffees, for £3 per cup for the next 12 months. The coffee shop has business certainty locked in, and the business can financially plan for their annual coffee costs.
What makes Good Energy’s approach to PPAs unique?
At Good Energy, we don’t buy electricity on the wholesale market and pretend it’s green. We match every single unit of power that we supply to businesses and homes with power bought directly, via PPAs, from our renewable generator community. And for each MWh we purchase, we buy the REGO alongside it.
As our business has grown, we’ve worked hard to create a generator portfolio that reflects how our customers are using electricity in real time. That’s meant signing PPAs with a wide range of technology types – both large and small-scale – spread all over Britain.
Between April 2024 and March 2025, we achieved an unrivalled 88% match between our total customer demand and renewable generation produced within the same half hour. This makes us unique in the energy sector and the greenest supplier on the Matched Clean Power Index.
Why are PPAs so important in the renewable energy transition?
1. PPAs help new renewable energy projects get built
Building renewable energy assets costs a lot of money up front, as well as ongoing costs to keep them going. When seeking a loan for your renewable energy project, a PPA will help give your project certainty over the amount of money you can make, as well as a customer for your electricity. Without PPAs, many renewable projects simply wouldn’t get approved or funded.
2. PPAs help stabilise energy prices
There are so many things that can affect the price of electricity. Too many electrons and not enough people using them means energy prices are low. The opposite happens when there’s not enough electrons and lots of people want to use them. Electricity prices like to jump around and a PPA will often fix the price (or at least limit how wild the prices can go) for a period of time.
At Good Energy, as standard we offer 6–36 month fixed price PPAs. We also offer longer term fixed PPAs if required.
3. PPAs let companies support renewable energy projects directly
Lots of businesses rightly have ambitious sustainability targets – sometimes called ESG targets. For a business signing up to a Corporate PPA with Good Energy, they can say that they are backing a specific renewable energy project by buying its electrons directly.
4. PPAs help the grid leave fossil fuels behind
As more renewable projects are built thanks to PPAs, fossil fuel plants run less often, electricity gets cleaner, emissions fall. Multiply that across hundreds of deals, and the whole power system shifts.
And as time-matched power moves into the mainstream, there will be a welcome focus on channelling funding towards building a balanced portfolio of renewable generation assets that truly reflect how we use energy here in Britain.
5. PPAs bring income to local economies
Good Energy champions small scale renewable generators. Many of our generators are farmers with small solar arrays on their land, rural community groups that have funded a hydro turbine; and innovative landowners who chose to build wind turbines well over a decade ago when the technology was relatively new to the UK as a way to diversify their income. Fairly priced PPAs provide a stable income for these generators and supports local economies.
Put simply, PPAs give renewable generators income certainty, help new projects get financed and built, stabilise prices and allow businesses and households to directly support the renewable energy transition.
If you own a renewable energy project and want a fair, stable price for your power, get in touch to see how a PPA with Good Energy can support you.
