Through a virtual PPA (vPPA) from a new solar park, the difference between the market spot price and the solar PPA price becomes your value. You’re adding green energy to the grid while at the same time hedging against fluctuations in electricity spot prices. Win win.
Since a vPPA is a financial instrument, it doesn’t have to change how you procure power at all – you can simply continue to pay for electricity just like you’ve always done. You will own the Guarantees of Origin (GOs) generated by the solar park, so you can buy less GOs from the market. You may also choose to do less hedging of your electricity supply, since the vPPA is a hedge in itself.
Now – let’s look at a real example of how a virtual PPA works in practice. Please note that the example is based on a standalone solar park in the south of Sweden (electricity bidding area SE4). Parks placed in other geographical regions will look different.