A Utility PPA is a contract between a renewable energy generator and a utility company, which then supplies that power to its end customers. While not directly between a business and a generator, some businesses can participate in or benefit from Utility PPAs by choosing green tariffs linked to these agreements.
In some cases, utilities offer custom green supply contracts backed by PPAs they've signed with generators. These arrangements give businesses access to renewable energy without requiring them to negotiate or manage the PPA directly.
Utility PPAs are best suited for smaller or less energy-intensive businesses, or those with limited procurement capacity. Retail stores, small offices, and service businesses can benefit from green tariffs based on utility PPAs, gaining carbon reporting advantages without complexity.
For large corporates, Utility PPAs can be a stepping stone toward deeper renewable energy commitments. Some utilities also offer tailored products that mimic the benefits of direct PPAs while simplifying the process.
This approach is effective for businesses with limited internal expertise or those in leased properties without control over infrastructure.
Though the benefits may not include additionality or price hedging to the same extent as direct PPAs, Utility PPAs still contribute to decarbonisation and meet Scope 2 emissions reduction goals.