A power purchase agreement (PPA) is a long-term contract between two parties: electricity producer (the seller), and electricity consumer (the buyer).

Usually, consumers buy electricity from independent electricity suppliers. However, PPA agreement enables consumers to buy electricity from Renewable Electricity Sources. PPA agreement is beneficial for both parties: electricity producer ensures stable income for project financing while electricity consumer fixes electricity costs by hedging from increasing electricity prices.

Since 1st of May, 2019 in Lithuania new subsidy scheme for renewable electricity sources was confirmed. Under new scheme RES developers/producers will no longer receive fixed feed-in-tariffs, will have to participate in the market and will be responsible for their own balancing. As a result, PPA  serves both buyers and sellers as an excellent tool to manage their electricity market risks.

Axton Commodities buys and sells electricity using long-term contracts, consults during PPA negotiations, deal structuring and finds most suitable buyers and sellers for every project.