CPPA: Why use an aggregator?

CPPA: managing market price volatility

The CPPA is designed for clients who consume significant volumes of electricity and wish to integrate green energy into their power supply while also involving renewable energy producers who wish to add value to their production and generate additional income to guarantee the profitability of their facilities.

This type of contract involves 4 stakeholders:

• A client seeking to decarbonize their energy supply while securing the price of a portion of their consumption,
• A producer who wishes to secure the financing of their assets,
• A supplier who must deliver a given volume of electricity, including an amount drawn from renewable energy linked to CPPA,
• An aggregator who integrates the energy volume set by the CPPA into the overall supply contract

The CPPA offers numerous advantages for these different parties. It enables consumers to meet scope 3 criteria, while ensuring the supply of green electricity at a fixed price. In this way, they can make a direct commitment to the energy transition and diversify their energy sources. The CPPA also ensures a secure and optimized income for producers.

The aggregator: managing customer risk

Under a CPPA, an aggregator such as Agregio Solutions acts as an intermediary between the consumer and the energy markets, formalizing this intervention through an aggregation contract.

In concrete terms, it takes responsibility for shaping (in other words, consolidating) wind generation (calendar ribbon) or solar generation (solar bell) to integrate it into the client’s consumption and thus bearing the associated risks.

An aggregator such as Agregio Solutions carries all the risks linked to the intermittence of renewable assets on behalf of the customer:

• The risk of deviation due to uncertain weather conditions, which Agregio Solutions covers by forecasting the production from photovoltaic and wind farms, and paying RTE penalties for deviations between the forecasted and actual production.
• The volume risk relates to the total energy delivered over the year. Due to the daily variability of production, the amount of energy produced is uncertain. By guaranteeing consumers an optimized quantity of energy (calendar ribbon and solar bell), the
  aggregator limits the consumer’s exposure to the energy market in the event of having to purchase additional energy.
• The “price” risk concerns the volatility of energy market prices. By covering the two previous risks, Agregio Solutions protects consumers from daily price fluctuations.

In conclusion, the CPPA represents an advantageous solution for all stakeholders, limiting both CO2 emissions and the use of fossil fuels, while encouraging the development of renewable projects. Beyond the environmental aspect, it presents a real financial advantage for stakeholders.