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Power purchase agreements & demand response for ind. power consumers

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Published on Tuesday, 24 September 2019

The share of corporate renewable power is on the rise globally as more and more companies are looking for ways to fulfill their sustainability targets.

In particular companies with high-end consumer products, like Apple, BMW and Volkswagen, put additional pressure onto their supply chain to become greener.

Renewable power purchase agreements (PPAs) offer a practical way for companies to directly purchase renewable energy from a wind or solar power plant. The German market for renewable PPAs is growing especially rapidly. Suppliers who are looking for options to source renewable power should pay attention, as this trend is likely to accelerate until 2020 when many German wind power producers are bound to lose the comfort of guaranteed feed-in tariffs. Wind power producers are already looking for reliable buyers who purchase their clean power at a fixed price.

Providing industrial demand response to the electricity market may soon pay off for manufacturing companies with high power consumption. Automated manufacturing systems that allow for flexible energy management pave the way for virtual power plants (VPP) to interface with their trading desk.

The VPP will then pass the flexibility premium to the manufacturer. While the market premium for industrial demand response is still low, this may change as soon as more and more volatile consumer like electric vehicles and producers like solar and wind enter the market and force traders to balance their portfolios on short notice. Manufacturing companies are therefore well advise to put energy management on the feature list when investing into automated manufacturing.

More about this research project managed by Prof. Nils Löhndorf


renewable power research