ENERES Co., Ltd

ENERES Co., Ltd. is releasing a “Hybrid Offsite PPA” as part of its corporate decarbonization solutions brand “eneGX,” allowing free switching between “Physical PPA” and “Virtual PPA” according to business environments and market conditions. The service is scheduled to begin in April 2025.

[Physical PPA and Virtual PPA]
An offsite PPA is a long-term renewable energy purchase agreement between a corporation, municipality, or other legal entity and a power generation company. It’s an increasingly popular renewable energy procurement method that allows securing renewable energy over the long term without owning power generation facilities. It’s also recognized for its “additionality,” which has been increasingly valued in recent years.
There are two types of offsite PPA: Physical PPAs, which procure both electricity and environmental value together, and Virtual PPAs, which procure only environmental value, each with their own advantages and disadvantages.
Physical PPAs generally fix the purchase price, providing the benefit of purchasing renewable energy at a stable price over the long term. However, since it involves electricity transactions, the contract is linked to demand sites, with restrictions such as generation and demand sites needing to be in the same area, and risks of surplus electricity. Virtual PPAs can reduce these Physical PPA risks. Virtual PPAs, which trade only environmental value, lack price stability due to contracts for difference based on market selling prices of electricity, but offer high flexibility in terms of conditions and are attractive for not being tied to specific locations.

[ENERES “Hybrid Offsite PPA”]
Physical PPAs involve electricity supply and therefore require a retail electricity provider. On the other hand, Virtual PPAs allow direct contracts between corporations and power generators, but require complex tasks such as contracts for difference and non-fossil certificate transfers.
The “Hybrid Offsite PPA” now being offered allows free switching between “Physical or Virtual” during the contract period by having ENERES handle all the necessary tasks required for each PPA contract. This is a solution that only ENERES, with functions as both a retail electricity provider (ENERES subsidiary, ENERES Power Marketing) and an aggregator, can provide.
By allowing flexible selection of procurement methods according to business environment and market conditions, it reduces the anxiety of “long-term contracts,” which is the biggest hurdle in implementing offsite PPAs. Additionally, comprehensive contracting from the beginning makes it possible to “maintain the original offtaker,” making it recommended for companies aiming for RE100.
This service also benefits power generators as ENERES, as an aggregator, handles the operational tasks that are required of them such as power generation forecasting and differential settlement processing.