June 13, 2025 | By Brooke Weichel

For many corporate energy buyers, uncertainty is no longer the exception in today’s global energy markets—it’s the new operating environment.

Particularly in Europe and the U.S., procurement teams have faced levels of price volatility far exceeding historical trends, compounded by broader pressures like geopolitical conflict, abrupt policy shifts, and changes in supply and demand patterns.

Market uncertainty presents a two-fold challenge for buyers navigating renewable electricity procurement: balancing supply and demand fluctuations common to all energy buyers with longer-term commitments like ESG targets and regulatory obligations. To ensure these considerations remain aligned with other changing priorities during periods of unpredictability, procurement strategies must naturally evolve. Yet when these shifts occur, we've observed many buyers disproportionately pause or avoid engagement with one tool in particular: the Power Purchase Agreement (PPA).

This blog explores a more expansive approach to PPAs. While it’s important to evaluate PPAs with caution and a clear understanding of potential drawbacks, we outline how a more nuanced understanding of the tool can help buyers unlock the full strategic value of renewable procurement—particularly in uncertain times

Why PPAs Still Matter in Unpredictable Markets

In many ways, it’s understandable that market uncertainty can lead some buyers to delay or avoid PPA engagement. PPAs are inherently complex instruments, and even under stable conditions, assessing their long-term value and risk—particularly from a financial perspective—can be challenging. Features of many modern corporate renewable PPAs, such as fixed pricing or energy consumption structures, may also appear at odds with common buyer priorities in unpredictable energy markets, such as purchasing flexibility or short-term responsiveness.

Though valid, these perspectives only offer a partial view of what PPAs can provide in uncertain conditions. Where traditional PPAs lack the flexibility of tradeable renewable instruments like Energy Attribute Certificates (EACs), they can offer other forms of stability—both financial and non-financial—for procurement teams navigating disruption. Increasingly diverse pricing and offtake models also demonstrate that flexibility and PPAs are not mutually exclusive.

Simply put: PPAs, like other procurement mechanisms, offer advantages and trade-offs, so their value depends on how well they align with a buyer’s specific priorities. During periods of energy market disruption, where priorities often shift, effective renewable procurement requires a nuanced understanding of how different tools can support evolving business needs.

With this in mind, we highlight two lesser-discussed perspectives on PPAs that may be relevant for corporate buyers focused on clean energy sourcing:

1. PPAs as a strategic lever for mitigating certain kinds of long-term risk in unpredictable environments

2. PPAs as an evolving procurement model that can be adapted to businesses' shifting priorities during market uncertainty

    

Mitigating Long-Term Risk with PPAs

Particularly for teams less familiar with structured instruments, the upfront costs or perceived risk exposure of a PPA can make short-term procurement options seem more attractive during periods of uncertainty. However, for the right buyer profile, a well-structured PPA may offer more financial and ESG-related strategic value than other options.

Long-term financial visibility is often a key driver of corporate engagement with PPAs, as their ability to provide budgeting certainty supports procurement planning regardless of market conditions. This visibility can be especially valuable during periods of unpredictability: buyers lock in electricity costs over several years, so they are insulated from fluctuations caused by energy market volatility or external pressures such as inflation or geopolitical instability. This differs from short-term environmental commodities like EACs, which generally offer more flexibility in contract terms and purchasing timelines but are traded in open markets and subject to supply-demand dynamics.

Perhaps less widely discussed are the ESG-related benefits that PPAs can offer compared to other Scope 2 instruments. Because they establish a direct contractual relationship with a renewable energy project, PPAs allow companies with public emissions reduction commitments to demonstrate measurable Scope 2 decarbonization progress in any market conditions. Their centralized, highly traceable structure can also streamline ESG reporting by reducing ambiguity around the source and impacts of procured electricity. Physical PPAs, for example, ensure that the environmental and economic benefits of renewable generation remain in the same region where the electricity is consumed. In times of uncertainty, this added layer of transparency can help reinforce investor confidence—especially as today’s large investors overwhelmingly view ESG as a tool to reduce volatility and tail risk.

Innovative PPA Structures for Enhanced Flexibility

Perceptions of PPAs as inflexible procurement instruments suited only for large, energy-intensive buyers also don’t align with today’s market reality. As corporate interest in renewables has grown in recent years, so too have the structuring options. Alternative models now allow buyers to access many strategic benefits of structured renewable procurement without overcommitting during times of uncertainty. These may include:

• Shorter-term PPAs: Medium-duration contracts designed for easier exits and lower long-term exposure.

• Virtual Power Purchase Agreements (vPPAs): Financial contracts that separate renewable electricity procurement from physical delivery.

• Aggregated or portfolio-based PPAs: Multi-buyer agreements that improve access for smaller offtakers through shared volume and risk.

• Hybrid models: Structures combining PPA offtake with unbundled Renewable Energy Certificates (RECs) to deliver stability and procurement flexibility.

In fact, the evolution of today's corporate PPA landscape has been shaped in part by demand for more adaptable options in a changing energy market. Per a 2023 report by the World Business Council for Sustainable Development, growing corporate interest in alternative PPA pricing models has been driven primarily by volatile wholesale power prices and expectations that increased renewable penetration will continue to drive down wind and solar market prices. This trend aligns with our own market experience at GO2 Markets. In recent years, our global developer network has diversified significantly—growing to include new partners focused on alternative PPA models, while many longstanding partners have expanded their portfolios beyond fixed-price* and fixed-consumption** structures.

* Fixed price such as: floating-price PPAs, cap-and-floor PPAs, discount-to-market PPAs, hybrid PPAs, and stepped or indexed escalation PPAs

**Fixed consumption such as: pay-as-produced PPAs, pay-as-consumed PPAs, pay-as-nominated PPAs, and shaped/profile-based PPAs

What This Means for Energy Buyers in Uncertain Times

While these are just two PPA-specific examples, they underscore a broader point about effective clean energy sourcing: as a highly individual, context-specific process, the value of different tools can shift as buyer priorities evolve.

This understanding guides how we approach corporate renewable energy procurement at GO2 Markets, particularly as we support clients navigating uncertain market conditions. Drawing on real-time insights from our extensive developer network and experience supporting buyers across sectors, we ensure that our clients can access the most impactful, relevant tools for their renewable electricity needs—whether that includes a PPA or not. As uncertainty becomes a lasting feature of the energy landscape, some of the most resilient strategies may come from revisiting familiar tools like PPAs with a fresh perspective.