The latest in a series of articles on energy markets in Southern Africa looks at how the region is transitioning away from the traditional power purchase agreements (PPA) that have long driven renewable energy deployment.
Merchant markets, trading, batteries and supply-demand dynamics are shifting renewable energy investment in Southern African away from traditional power purchase agreements (PPAs).
Dominic Goncalves, Advisory Partner for Energy Strategy at Cresco Project Finance and Founder & Director of Naviara Energy, told pv magazine that for the last fifteen years, PPAs have been the central business contract that underpins renewable energy projects in Southern Africa.
“Traditional PPAs helped mobilize the first major waves of independent power investment across Africa, by reducing market risk and creating predictable cash flows,” Goncalves explained. “But the structure also concentrated risk in a single buyer and treated renewable electricity largely as a uniform block of energy.”
A shifting market
