Usefulness of models of Power Purchasing Agreements Sample Clauses

Usefulness of models of Power Purchasing Agreements. On-site PPA, just as off-grid P2P trading, is also attractive since it will (partly) avoid retail electricity prices (incl. grid fees, taxes and FIT surcharge in Japan, but it will not avoid the FIT levy in Germany for PV plants larger than 10 kW) for the PPA parties. In Japan, this model is still the mainstream of PPA, which is relatively easier to be implemented compared to on-grid PPA, since the Japanese electricity market is less matured and the country is not abundant in renewable electricity as much as Germany. This model would increase the share of grid costs for the other connected consumers to pay, which is a distributional effect. Still, as it is a model that may accelerate construction of RES-E plants, especially building-integrated PV, outside of the FIP/MP system, it should be allowed by laws and regulations. It could also be coupled with P2P non-FIT/FIP/MP trading for electricity surpluses or even with allowing feed-in of surplus power at a FIP. Otherwise, there is a risk that the full potential for on- site PV will not be used, but only the fraction of the potential capacity that is below a typical daytime load of the site. For example, in Japan, the capacity of on-site PPAs is often intentionally set well below the maximum load of the site. A special model in Germany is aiming to enable tenants to purchase electricity from a PV plant on the building they live in (the German name for this model is ‘Mieterstrom’, which means ‘tenant electricity’). This is trying to put tenants on par with households owning their house, who can invest in a PV plant and self-consume the power or earn the FIT. However, the rules and economic parameters are currently not supportive enough for mass roll-out of the concept. On-grid PPA: 1) This can be a useful model for sustaining post-FIT operation of PV or wind power plants; but either the wholesale power price is sufficient to sustain continued operation of post- FIT plant, so that a PPA is not needed; or the wholesale power price is too low or too uncertain, so PPAs can provide certainty or enable the continued operation at all. The question may in that case be: Should this continued operation not be for the benefit of all consumers, who paid for the plants thoughout the FIT period? And if so, how can the benefits and costs be equally shared between all consumers? Theoretically, this may be achievable either through a kind of “macro- PPA” – i.e. the government regulating that TSOs or DSOs, or a public single bu...
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