First model contract for the German PPA market

Berlin, Germany, 6 February 2024. The direct purchase of green electricity plays a central role for many companies in order to integrate price security and decarbonisation into their business model. However, concluding direct electricity supply contracts is currently a major challenge, particularly for smaller companies and municipal utilities, due to a lack of personnel capacity and expertise. The model contract for the German market published today by dena’s Renewable Energies Market Initiative is intended to support these companies in particular when concluding a power purchase agreement (PPA). The model contract enables them to conclude a supply contract even without in-depth knowledge of PPA contract types and electricity market effects. The specifics of German law and electricity trading are reflected accordingly. The associated guidance notes provide information on key aspects and design options.

Tibor Fischer, spokesperson for dena’s Renewable Energies Market Initiative, said, ‘a growing PPA market can reduce energy costs for companies and promote climate-friendly business models while accelerating the energy transition as a whole. The Renewable Energies Market Initiative strengthens this business model thanks to this model contract while opening up the market to smaller customers. In this manner, the initiative also supports the German government’s strategy, which also wants to support the development of standards in this area. With greater transparency and standardisation, the agreement strengthens this important segment of the energy market. The initiative thus also fulfils a central requirement of the Renewable Energy Directive at EU level, which stipulates that Member States should facilitate market access by standardising contracts.’

With its experience in the standardisation of energy trading contracts and associated processes, EFET Deutschland – Verband Deutscher Gas- und Stromhändler e.V. was able to assist in the development of the model contract. Anne Köhler, Managing Director of EFET Deutschland, emphasises, ‘we support the establishment and development of open, transparent and liquid energy markets by providing and maintaining model contracts. The availability of a standardised contract template can reduce the transaction costs for all parties involved.’

The customisable text of the contract enables customers to conclude a PPA with a marketing company for electricity. The contract was based on the profile of a fixed quantity price plan in order to integrate the delivery into existing contract constellations and to simplify management. This means that the company receives the same amount of electricity from renewable energy sources at all times. Fluctuations in generation within this contractually agreed supply do not have to be regulated via corresponding contract options.

The PPA model contract for fixed quantity price planning was created in cooperation with EFET Deutschland, the law firms Von Bredow Valentin Herz, DLA Piper and gunnercooke as part of the Renewable Energies Market Initiative.

The customisable contract template and the associated guidance notes are now available on the website of the Renewable Energies Market Initiative, and the new model contract will be presented to the public in webinars and other events over the coming weeks.

For three years now, the market initiative has been working to strengthen the expansion of renewable energies through complementary market-driven expansion. The current work programme includes the creation of further model contracts for PPA, in addition to many other activities.

About the Renewable Energies Market Initiative

The Renewable Energies Market Initiative is an association of around 50 companies from the supply and demand side of the economy as well as service providers and covers the entire value chain. The common goal is to develop the market for renewable energies with various measures and activities and to help Germany achieve its energy transition targets. The Renewable Energies Market Initiative was launched by dena, the German Chamber of Industry and Commerce and Klimaschutz-Unternehmen e.V. Further, these institutions provide the operational support. Please visit dena.de/marktoffensive-ee/ for further information.