Economic and political factors. 1.1.1 A favourable economic context Falling production costs of RE and of certain associated technologies, such as storage technologies, make RE an increasingly attractive market in Europe. This combined with increased environmental awareness in the popula- tion, stimulate the demand for green electricity. But despite this favourable context, RE prices remain very volatile on wholesale electricity markets (whether for- xxxx, day-ahead or intraday markets). Entering into a PPA, which is a long-term agreement, generally between ten and twenty years, and which pro- vides for a fixed price or minimum price, is a way for producers to secure income over several years, and thus to lower their exposure to market fluctuations. Also, a PPA * Partner, specialising in environment law, Eversheds Xxxxxx- land. Email: Xxxxx-XxxxxxXxxxxx@xxxxxxxxx-xxxxxxxxxx.xxx. ** Lawyer, Eversheds Sutherland. Email: Xxxxx-xxxxxxxxxxxx@xxxxxxxxx-xxxxxxxxxx.xxx. 1 Xxxxxx Xxxxxxx, French PPAs Set to Double by Mid- 2021 – Wind Lobby, Xxxxxx (29 May 2020), xxxxx://xxx.xxx- xxxxxxx.xxx/xx/xxxxx/xxxxxx-xxxx-xxx-xx-xxxxxx-xx-xxx-0000– wind-lobby/1118657. (accessed on 6 August 2020). may prove to be more profitable, in comparison with the traditional mechanism under which electricity is sold on the electricity market. By way of example, SNCF Energie and Voltalia signed a twenty-five-year PPA in June 2019. To Voltalia, this long term was a ‘necessary condition for competitive electricity selling prices’.2 Entering into a PPA may also be a means of facilitating the securing of financing for new RE projects, like the PPA announced by Engie in December 2019. This ‘greenfield’ PPA will relate to approx. 25GWh per year, produced by a photovoltaic power plant to be built in Fanjeaux (Aude, France) as from November 2020. The electricity produced will be supplied to certain Engie customers (authorities, tertiary sector, and manufacturers). It is also the case of the PPA entered into by Boulanger. The agreement relates to a solar power plant that will be built, owned and operated by Voltalia, and which will account for at least 10% of Xxx- xxxxxx’x consumption by 2022. On the corporate customer side, the signature of PPAs allow companies to plan their power purchase policy in the shorter or longer term, and to control and secure their energy costs. For Métro for instance, the first company in France to sign a PPA in March 2019 with Agregio, a subsidiary of Electricité de France (EDF), the PPA is part of ...
