Powering tomorrow Navigating the energy transition landscape 2024 - Flipbook - Page 11
At the same time, renewable PPAs may start to
be negotiated di昀昀erently as energy prices
shift. Delays stemming from labor shortages,
construction issues, and supplier commitments
only add to the complexity, as do the price
sensitivities of certain customers (e.g., landlords
may be less sensitive to higher prices, as they
can pass on added costs to renters). The use of
price reopener clauses, which can be triggered
in a number of di昀昀erent ways, is, therefore, an
important tool in dealmakers’ toolboxes.
‘‘
Hogan Lovells is very dedicated and
advises with outstanding quality in
terms of a short-notice preliminary
view, followed by comprehensive
analysis of this view later.
‘‘
Fluctuating prices and new entrants are
accelerating alternative deal structures.
Smaller countries and companies are getting
involved, catalyzing new avenues for dealmaking.
In Asia, for instance, cross-border renewable
PPAs—like Singapore’s Lao PDR-ThailandMalaysia-Singapore Power Integration Project—
are on the rise, while the virtual PPA structure has
successfully brought smaller organizations o昀昀 the
sidelines (e.g., those in the U.S. who are based in
states that do not have active markets for PPAs).
Projects & Infrastructure, International,
Singapore, Chambers Global, 2023
A heightened focus on renewable energy
certi昀椀cates (RECs), which represent the
property rights to the environmental and
social attributes of renewable energy
generation, will persist in the U.S. as
o昀昀takers look to avoid “greenwashing” claims.
This emphasis might require REC suppliers to
take on additional obligations, such as providing
representations and warranties that assure they
are in compliance with various protocols related to
the reporting of RECs, as well as agreeing to take
action should issues arise.
Increasingly, companies also want named assets
in their PPAs (and the RECs that stem from them),
as it creates an audit trail that can be more helpful
should they face critiques. On the developer
side, meanwhile, some in the U.S. are starting
to decouple RECs from the projects’ broader
environmental attributes, with the hopes that
these attributes may generate additional value
down the road.
Despite the evolving nature of renewable PPAs—
and the growing number of corporations taking
advantage of them—there remains a substantial
untapped market of potential buyers. If you haven’t
explored the potential of these agreements, now is
the time to enter the fray.
Hogan Lovells | Powering tomorrow: Navigating the energy transition landscape
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