April 18, 2018

GERONIMO BLOG: Single, Large-Scale versus Aggregated Virtual Power Purchase Agreements

In the early stages of planning your company’s renewable energy plan, careful assessment of your energy needs and goals should always come first. Outlining your long-term energy needs and goals will set you up for success when constructing your contract with a renewable energy developer.

The market for Virtual Power Purchase Agreements (VPPA) is diverse and can be complicated. An important thing to consider when you begin your research is what type of VPPA your company prefers. There are generally two types of VPPAs: a single, large-scale VPPA, or an aggregated, small-scale VPPA. Both have the same core tenants:

– Companies virtually purchase power via a long-term contract (there is no physical delivery of power to the buyer)

– The buyer and seller agree on a strike price for the power, as well as a settlement schedule

– Companies receive the environmental attributes, or Renewable Energy Credits (RECs), produced by the project

– For more information about how VPPAs work, check out this blog entry.

What’s Right for My Company?

Aggregated and large-scale VPPAs both are attractive and favorable investments for companies because they require no capital investment, hedge energy prices, reduce electric expenses, help to attain corporate sustainability goals, and increase public relations, loyalty, and brand awareness.

The Differences: Single, Large vs Aggregated VPPAs

– A single, large-scale VPPA is a contract for the majority or the entire production of a single project. Companies that execute large-scale VPPAs are typically the only contracting partner or serve as the anchor offtaker (and the developer secures additional smaller offtakers for the small remaining portion of the project’s production).

– An aggregated VPPA is a contract for a portion of a larger project (typically 10 megawatt (MW) blocks). There are multiple offtakers in an aggregated VPPA and together, these contracts comprise the entire project’s production.

Despite their similarities, there are a few key areas that make each type of VPPA unique. Each of the unique qualities must be evaluated by your renewable energy team to determine which choice is a better fit for the individual needs of your company.

For example, if aligning your electric consumption location(s) with your contracted project’s location is important to your organization, consideration of large-scale vs aggregated VPPAs is important. Customers with large electric load that is consumed in a handful of locations might prefer a large-scale, singular VPPA from a project located near their electric consumption location. In contrast, customers with geographically distributed electric consumption might prefer multiple aggregated VPPAs from projects dispersed throughout their electric consumption locations.

The Benefits: Single, Large vs Aggregated VPPAs

– Aggregated VPPAs allow your company to purchase portions of projects at a low cost, take advantage of the economies of scale, provide an opportunity for your company to be a part of a coalition of like-minded corporations, and offer simplified contracts. However, because the contracted project has multiple VPPA offtakers, the contract likely cannot be as customized as a singular, large-scale VPPA.

– On the other hand, a large-scale VPPA gives the contracting company  ultimate control as the single or anchor off-taker (such as branding and public relations), reduces pricing (as contracted MW increases, price decreases), and allows for a customized contract. The potential disadvantage of a large-scale VPPA  is that it may take much longer to execute than an aggregated VPPA, given the increased customization and flexibilities offered in the contract.

Click on the image below for a flow chart regarding the details of large vs aggregated VPPAs.



Was this helpful? Share this article or contact us to learn more how Geronimo Energy can help your organization or company achieve their green energy initiatives.



Stay In "The Know"

Keep up to date with industry
news and information by
signing up for our corporate
communications. It's FREE.



Please contact us anytime!



September 23-29

Climate Week NYC 2019

New York City, NY

Climate Week continues to grow as the time and place for the world to showcase amazing climate action and discuss how to do more. Meet us there for a week-long series of events reflecting the core pillars of the UN’s summit!

September 23-26

Solar Power International and Energy Storage International

Salt Lake City, UT

North America Smart Energy Week, which hosts Solar Power International and Energy Storage International, is the largest gathering of solar, smart energy, energy storage and hydrogen fuel cell professionals in North America. Join Geronimo Energy for four days of networking, education, and innovation that moves the industry forward!

October 6-9

EEI National Key Accounts Workshop

Las Vegas, NV

Come join us at the EEI National Key Account Workshop as we expand our knowledge on energy in the marketplace and dive deeper into technology, managing energy, sustainability, supply, and fundamentals of energy during various breakout sessions.

October 8

Great Plains and EmPower North Dakota Energy Conference

Bismarck, ND

Great Plains and EmPower North Dakota Energy Conference will explore diverse energy topics on the state, regional and national level. Meet Geronimo Energy in Bismarck for the 13th year of this event!

October 8-10

NAEMA 2019 Fall Conference

Scottsdale, AZ

The North America Energy Markets Association (NAEMA) 2019 Fall Conference will cover key issues by industry experts and thought-leaders. Head to Arizona to learn and network at this regional event.

October 8-11

MMEA 2019 Fall Conference

Acme, MI

The Michigan Municipal Electric Association (MMEA) 2019 Fall Conference is set to focus on all things renewable in Michigan. Join Geronimo Energy as we develop our knowledge on Michigan’s relationship with renewable energy.

October 10-11

AWEA Wind Energy Finance & Investment Conference

New York, NY

Geronimo Energy is headed to American Wind Energy Association (AWEA) Wind Energy Finance & Investment Conference in New York City for high impact meetings, innovative sessions, and cutting edge education to cultivate business connections with top bankers, financial leaders, developers, and corporate decision makers leading the industry forward.

October 15-16

GCPA Fall 2019 Conference

Austin, TX

The Gulf Coast Power Association (GCPA) Fall 2019 Conference is the power industry’s leading electric power conference for the ERCOT and Gulf Coast regions. Geronimo Energy is looking forward to getting updated on the latest energy developments in ERCOT.