Power Purchase Agreements
Power Purchase Agreements
Power Purchase Agreements (PPAs) offer many benefits to companies transitioning to renewable energy while mitigating the risks associated with traditional energy sources.
As a leading renewable energy provider and independent power producer (IPP), we offer a range of PPA options across multiple industries. We want to help companies make sustainable decisions that advance their decarbonisation goals while delivering long-term financial benefits.
What is a PPA?
A Power Purchase Agreement (PPA) is a long-term contract between an electricity producer and a buyer, under which the buyer agrees to purchase electricity at a pre-agreed price for a fixed period of time. PPAs provide price certainty and predictable revenue, while enabling companies and utilities to secure renewable electricity and reduce exposure to power market volatility. They are a key instrument for financing and deploying new renewable energy projects such as wind and solar.
Benefits of a power purchase agreement
Types of PPA contracts we offer
Physical PPAs
A physical PPA is a contractual arrangement where the renewable asset and the offtaker are located in the same electricity market or price area, enabling the physical delivery of renewable power through the grid.
Physical PPAs define all key commercial terms—such as pricing, volumes, and delivery profiles—while operational aspects are handled seamlessly. Balancing is managed by a designated Balance Responsible Party (BRP), typically Ilmatar or a sleeving partner, allowing corporate customers to focus on securing clean energy without operational complexity. Ilmatar can act as the Balance Responsible Party for all PPAs it offers, regardless of technology, providing a simple, fully integrated solution across wind, solar, and storage.
Virtual/Financial (vPPAs)
Virtual Power Purchase Agreements (VPPAs) are financial contracts that let companies acquire the environmental benefits of renewable energy without having electricity demand in the same grid area as the renewable asset. This helps companies meet sustainability goals without managing energy infrastructure. With the help of the VPPA’s companies can support renewable projects and gain recognition for green efforts with less operational involvement.
Hybrid solutions
Hybrid PPAs combine multiple generation technologies—such as onshore wind, solar PV, and increasingly Battery Energy Storage Systems (BESS)—within a single commercial structure. By blending generation profiles, hybrid PPAs reduce production variability and improve overall capture rates.
The integration of wind and solar smooths intermittency, while BESS enables further optimisation through shifting, firming, and ancillary services. As a result, hybrid PPAs provide customers with more stable, predictable, and higher-value renewable electricity compared to single-technology contracts.
Contact us
Would you like to know more about the PPA’s? We are here to advise you.
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Mikko Hyvölä
Business Development Associate, Corporate Finance
Ilmatar Energy Oy
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Helena Arola
Project Development Manager
Ilmatar
Q & A’s
News & Views
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From Production to Value Creation – The Role of Power Trading in Renewable Energy
Renewable energy is more than investments in production assets and the generation of clean electricity. A significant share of its economic value is created through power trading and production optimisation.
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More about what we do
Onshore windpower
Our onshore wind farms harness the power of nature to generate clean electricity. These wind turbines stand tall, capturing the kinetic energy of the wind and converting it into usable energy for homes, businesses, and industries.
Solar power
We center our efforts on large-scale solar power installations in the Nordics. By harnessing abundant and free sunlight through solar panels, we contribute to generating electricity while reducing our reliance on fossil fuels.
Energy storage
We recognize the importance of energy storage. We focus on creating facilities for storing excess energy when production exceeds demand, ensuring a stable grid and reliable power supply. These innovations pave the way for a more resilient and sustainable energy system.