Industry: Residential

Welcome to the Knowledge Up, Carbon Down series.
We want you to master the transformation to renewable energy in Australia, leading communities into the
zero-carbon world with ZEN. Click play and learn more about the Energy industry terms.

EPISODE 2 – What is a PPA?

Transcript

Hi all! Welcome to our second instalment of Knowledge Up, Carbon Down.

Today we will be talking about a PPA with a grid-scale asset.
A PPA stands for Power Purchase Agreement, and it is a long-term agreement between a buyer and a seller of electricity at a fixed price.

The benefits of the PPA is that it reduces the time to market risk for an organisation and increases the sustainability metrics. The traditional approach of a PPA was for an organisation to contract a PPA directly with the renewable energy asset. This comes with a higher level of risk for the organisation. An example of this is my solar farm here and this is the generation curve. If an organisation is consuming outside of the times when the solar farm is generating, then they are exposed to the volatile Wholesale market.

A different approach is a lower-risk alternative, where a retailer, such as ZEN Energy, takes on that risk for the organisation. We take on the risk and package up the renewable energy contract into a low-risk simple, and finance-friendly offering, meaning that you are getting your renewable energy at times when you needed, at a price that is certain.

So just to recap, a PPA is a Power Purchase Agreement which is a long-term agreement between a buyer and a seller.

Thanks for joining us today, and please give us a thumbs up if you enjoyed the video.

Welcome to the Knowledge Up, Carbon Down series.
We want you to master the transformation to renewable energy in Australia, leading communities into the
zero-carbon world with ZEN. Click play and learn more about the Energy industry terms.

EPISODE 1 – MW x MWh

Transcript

Hi, my name is Lara Reid; I work at ZEN Energy.

I get laughed at a little bit in the office because I love a whiteboard. But I’m going to use my trusty whiteboard here today to explain the difference between
Megawatts and Megawatt hours.

So, we’ve got a hypothetical solar farm scenario here.  Stay with me on the bucket; that will make sense later on.

This solar farm is a 10-megawatt farm. So that’s the installed capacity of the solar farm. It’s going to run for two hours at optimal weather conditions, and it’s going to generate
20 Megawatt hours of electricity over that period of time, and that’s what they are permitting.

Another way to think about that is a hose in a bucket scenario. So in this scenario, it’s the size of the hose, which is measured in Megawatts, and it’s the volume of the bucket that’s measured in Megawatt hours. A one-megawatt hose running for five hours will produce five-megawatt hours of volume.

Just to recap, Megawatts is installed capacity and Megawatt hours is electricity generated.

I hope you find that helpful, and if so, give us a thumbs up.