Manually managing all the necessary data related to your  Power Purchase Agreements (PPAs) is resource-intensive, making it hard to ensure sufficient oversight for effective monitoring of these contracts. This approach can lead to missed contract breaches, unexpected portfolio performance, and human errors, leaving organizations exposed to various risks.

To remedy this, companies can use software tools for PPA management and automate their PPA data collection. In doing so, they can improve visibility into price and volumetric risks related to PPA contracts, enable data-driven decision-making, and optimize their resource allocation. With real-time insights into contract performance, EAC portfolios, and cash-flow projections, energy buyers can anticipate potential risks ahead of time, such as liquidity risks, volume underperformance or deviations from agreed-upon generation availability.

This blog will introduce you to the basics and dive deep into how automating PPA management can enhance financial and risk management within organizations.

What is a Power Purchase Agreement (PPA)? 

Power Purchase Agreements (PPAs) refer to long-term, renewable energy contracts between a power producer, typically a renewable energy generator, and a power purchaser, which can be a utility company or a larger corporation. These contracts outline the terms and conditions for buying and selling a specific amount of electricity over a predetermined period. By having a direct agreement with a power producer, companies can have a much clearer, direct impact on stimulating more supply of renewable electricity. It also provides more price stability for the buyer as they are entering into a long-term contact with a predefined price for the supply of electricity.

4  Benefits of Automating PPA Management

Organizations that lack clear visibility into the performance of PPAs will find it difficult to monitor contract performance and manage cash flow fluctuations. Avoiding these outcomes requires a robust, comprehensive platform like Flexidao’s that can automate PPA accounting and monitoring processes. Here’s how:

1. Avoid costly invoicing errors with deeper oversight

Managing virtual PPA contracts and estimating cash flow commitments can be complex, requiring diverse data sets from multiple sources. Our solution simplifies this by providing detailed reports and dashboards that cover key KPIs such as cash flow performance and quantitative forecasts for both near and long-term periods.  Streamline accounting for Power Purchase Agreements with timely and accurate invoice validation and tracking of financial settlements. Gain critical insights into the historical and projected financial performance of your PPA and effectively manage liquidity risk.

2 Save valuable time in periodic data collection and processing

Manual tasks associated with data collection, consolidation, and standardization consume significant time. By automating these processes, our digital platform ensures seamless and accurate data handling, allowing you to focus on strategic decision-making rather than tedious manual work and quality assurance. Real-time updates and automated monitoring of KPIs enhance productivity and operational efficiency and accuracy.

3. Ensure contract performance by enforcing availability guarantees

Ensuring compliance with contract terms, especially concerning availability guarantees, demands reliable access to historical and real-time data. Our platform allows you to monitor project operational performance and automate availability calculations to assess whether availability guarantees and contractual performance clauses are being met. Gain deep insights into historical hourly generation, price values, and outage reports to ensure your expected generation volumes are met.

4. Optimize your reporting with streamlined Management of Energy Attribute Certificates (EACs)

Efficient management of the EACs related to your PPA contracts is crucial for compliance, transparency in reporting, and ensuring that you receive the EACs that you should. Our platform automates the tracking, retirement, and documentation of EACs, maintaining a clear chain of custody. By keeping a historical record of all certificates and their official documentation, you can easily manage country-level claims and group audits, ensuring all stakeholders have timely access to the required information.

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Why Choose Flexidao

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Flexidao’s software provides high-resolution intelligence for PPA performance optimization by the automation of invoice settlement verification, cash-flow projections and data collection. This data is automatically input into our intuitive platform. Here, you can monitor the volumetric, financial and environmental performance of your PPA contracts, helping you to identify key volumetric and liquidity risks. Flexidao’s platform also tracks and updates Energy Attribute Certificates (EACs) portfolio balances, ensuring a clear chain of custody for all received and expected EACs issued by your contracts for optimal energy emission reporting. 

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