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ARTICLE · 08 NOVEMBER 2024

Renewable Virtual Power Purchase Agreements And The Clean Energy Landscape

Borden Ladner Gervais LLP
Borden Ladner Gervais LLP
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Canadian corporations are turning to renewable virtual power purchase agreements as an emerging component of their energy procurement strategies.

CanadaEnergy and Natural Resources
John Vellone
John Vellone
Katherine Stanger
Katherine Stanger
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Canadian corporations are turning to renewable virtual power purchase agreements as an emerging component of their energy procurement strategies. By securing a long-term fixed price for renewable energy, VPPAs offer companies a mechanism to hedge against fluctuations in market prices, supporting corporate sustainability goals and providing a level of predictability in energy costs. However, the effectiveness of VPPAs as a hedge often hinges on artificial electricity markets.

This article will examine several recent examples of market rules changes across Canada and assess how these evolving frameworks impact VPPAs.

What are VPPAs?

Virtual Power Purchase Agreements (VPPAs) are power purchase agreements, i.e., contracts between energy developers and buyers, typically utilities, to purchase and receive power generated from energy assets, which differ from traditional power purchase agreements (PPAs) stemming from two key distinctions:

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