The European Commission has published a recommendation urging EU countries to remove barriers to power purchase agreements (PPAs) and other energy purchase contracts.
PPAs are long-term contracts in which an energy generator sells electricity directly to a corporate buyer, the Commission said in a statement on Wednesday.
It added that such deals can help companies secure more predictable energy prices over time and support the construction of new clean energy installations.
The Commission noted PPAs drew attention after energy price spikes in 2022, when they were identified as one way some businesses could reduce exposure to volatile prices.
However, the Commission said the “full potential” of PPAs has not been realised because of regulatory and non-regulatory barriers.
What the recommendation covers
The recommendation addresses obstacles including access for smaller buyers, the use of guarantees and other risk-reduction measures, accounting rules, and “guarantees of origin” — certificates used in Europe to show that energy comes from renewable sources, the Commission said.
While mainly focused on electricity PPAs, the guidance also covers purchase agreements for other energy carriers such as heat, biogas and hydrogen.
The Commission said the new recommendation builds on earlier Commission guidance aimed at facilitating PPAs, which was published in May 2022.
A four-week call for evidence earlier this year fed into the Commission’s assessment of the barriers affecting PPAs.
It added that removing barriers to PPAs is provided for in EU law including the Renewable Energy Directive and the Electricity Regulation, which reference PPAs as a tool to help finance new clean energy installations while offering more stable prices for consumers.
