The safest way to boost revenue and accelerate your ROI

UrbanChain’s Chief Commercial Officer Dr Mo Hajhashem drills down into the detail of their P2P PPA offer - a 24.8% saving for asset managers.

The Safest Way To Boost Revenue And Accelerate Your ROI

The UK energy crisis of 2021 shows no signs of diminishing, and few are escaping the wrath of a volatile market that is the direct result of a model that has for too long been broken. Among those losing out are power producers and asset managers with traditional Power Purchase Agreements (PPAs) in place. Today’s energy market, as we step firmly into 2022, is no place for traditional PPAs with single credit backing. They are simply no longer secure in these unprecedented times.

So why are current PPAs failing?

  • Firstly, the fact they are linked to the wholesale market means they are directly affected by the risk of volatile gas prices.
  • Secondly, current PPAs don’t cover subsidies so are not suitable for newly built assets.
  • Thirdly, they are secured based on a single credit assessment, i.e. arranging the relationship between one generator and one off-taker in one contract. The result is that the off-taker’s credit is underlined with risk massively increasing.
  • Fourthly, while we understand that most asset managers prefer highly credible off-takers - mainly the big six energy suppliers or large corporations - as it secures the revenue stream. It’s a current practice that is multi-layered, with agents in the middle.
  • Fifthly, while there has been some progress on corporate PPAs, the match between corporate consumers and generation assets is not optimised meaning the deal isn’t financially maximised for either party.

What's the difference between UrbanChain’s P2P PPAs and traditional PPAs? When you pit traditional PPAs against our P2P PPAs, there’s little competition. Here is a quote from ‘Bird & Bird Corporate PPAs, 2020/2021 Edition’.

‘The contract that the corporate enters into with the blockchain provider is simpler than a corporate PPA entered into directly with a generator would be (particularly if the corporate was aggregating demand with others under a club corporate PPA). Blockchain PPAs therefore offer up a real opportunity to open up a route to market for a broader range and volume of corporate energy consumers.’

UrbanChain exists as a solution to the energy market’s broken model - and it works for all market participants. Our P2P energy exchange is an AI & Blockchain system that aggregates, clusters, and matches the renewable assets with consumption curves, overcoming the intermittency and fluctuation of renewable power by creating solid blocks (shapes), making them viable without government subsidies.

The created shapes in our system are based on the consumption profiles of our corporate consumers. And while many corporations, due to the high price of energy, have decided to go down the route of self-generation. Our P2P energy exchange platform provides the most efficient and rewarding way of doing this. As a result, asset managers can take advantage of P2P PPAs, aligned with desirable and credible corporate consumers. So while securing revenue streams in a collectively guaranteed deal, we enable asset managers to achieve 20% higher returns on average.

Put simply, our P2P PPAs are designed to benefit from collective credit to safeguard and optimise renewable investments. This is all about network efficiency, it’s important to remember that newly-built assets are also mostly unsubsidised. Our P2P PPAs make them viable without government subsidies. This is why now is the time to switch to UrbanChain.

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