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It started with a spreadsheet, a stomach knot, and a boardroom that smelled faintly of burnt coffee. The CFO of a mid-sized Dutch manufacturer watched the electricity line on her P&L graph rise upward for the third quarter in a row. Then a quiet pitch landed on the table: a long‑term agreement to buy clean power at a predictable price. A power purchase agreement, handled end‑to‑end by AFS Energy. She didn’t need a new turbine on the roof; she required certainty.
The Trouble With “Green” That Changes Every Quarter
The year the gas market spiked, monthly bills felt like a game of roulette. You could hit black (cheap), red (painful), or—on awful weeks—zero (budget blown). That volatility doesn’t just bruise margins; it erodes trust in any climate plan based on yesterday’s prices. The marketing language might glow, but if finance can’t forecast, sustainability turns into a mood board.
One thing to copy today: pull last year’s invoices and chart your unit price. If the curve looks like a seismograph, you’re the target audience for a PPA.
Why trophies don’t help
Solar selfies and glossy “100% green” badges are photogenic. However, short-term certificates rarely lock in costs or capacity. A PPA, boring as a binder, changes the plumbing, not just the paint.
A quick sensory check
Picture the hum of turbines beyond a foggy dike, the same pitch at midnight as at noon. That’s what predictable generation feels like on your balance sheet.
How a PPA Actually Works (Without Jargon Headaches)
A developer builds or expands a wind or solar project. You sign for a share of its output for 10–15 years. The price can be fixed, indexed, or a combination of both. In a physical PPA, electrons are scheduled to your sites; in a virtual PPA (vPPA), you settle the price difference financially while receiving renewable certificates that prove origin.
One step to copy today: write down three numbers—annual MWh, sites/locations, and the percentage of load you’d be comfortable fixing for a decade. Those three numbers start every proper conversation.
two big levers
- Tenor & volume: Longer tenor = stronger hedge, but more governance. Volume can be baseload (flat) or shaped (closer to your load).
- Pricing logic: Fixed is simple; indexed rides a benchmark with caps/floors. Hybrids exist.
Why middle‑market companies can play now
Aggregation changed the game. Buyers pool demand, share legal costs, and unlock projects sized for communities of mid‑sized loads rather than one hyperscale campus.
A Scene From Rotterdam: The Quiet Win
The packaging plant that consistently missed its EBITDA target did one unconventional thing: it signed a 12-year vPPA at €61/MWh for 25 GWh per year. The first quarter after going live, the CFO’s weekly ops call became shorter. Emissions fell, invoices stopped yelling, and suppliers started asking how they had managed to do it. No ribbon cuttings. Just fewer headaches.
Copy today: Ask an advisor for a red-team model, including best, base, and worst-case power prices, against your shortlisted deal. If you can live with the worst, you can sleep through the rest.
A brief note on proof
Certificates of origin (GOs/RECs/I‑RECs) are the paperwork backbone. They aren’t vibes; they’re auditable.
The people problem you’ll actually face
It isn’t math—it’s silos. Procurement, finance, and sustainability have to agree on what “good” looks like. Ten minutes aligning definitions beats ten weeks rewriting a term sheet.
Risks You Can See Coming (and How to Disarm Them)
Energy deals fail in the footnotes. Balancing costs, curtailment clauses, and credit provisions—none are romantic, all are critical. Markets can go lower than you expect; they can also go weirder than you can imagine. That’s why you don’t sign a headline—you sign a model.
Action to copy: insist on scenario analysis with at least three historical replay periods (e.g., low, average, and high volatility years). Bake that discipline into your governance memo.
The short checklist that saves deals
- Stress‑test downside first.
- Match contract volume to real load; avoid heroic optimism.
- Price the non‑energy pieces (imbalance, shape, basis).
- Tie reporting to accepted standards (GHG Protocol, market‑based).
A quick metaphor for the board
A PPA is less a trophy car than a reliable train timetable. It won’t wow the neighbors—but it will get your factory up and running on time.
The 90‑Day Sprint to a Credible First Deal
Day 1–30: gather data (MWh, sites, load curves), align teams, define “acceptable risk.” Day 31–60: canvass the market, compare physical vs virtual, request draft terms, model three price scenarios. Day 61–90: negotiate guardrails (caps/floors, curtailment, credit), prep board paper, pre‑wire accounting and disclosure.
Copy today: Nominate one owner across finance + sustainability. Split decisions stall; accountable owners sign.
What changes after signing
Not the lobby signage. The cadence. Forecast meetings stop being guessing contests. Investor Q&A gets easier. Recruiting conversations get brighter.
What doesn’t change
You still need efficiency. A cheaper, greener MWh is still a wasted MWh if you don’t reduce demand.
FAQ — Short, Straight Answers
Q1. Will a PPA always save money? No. It’s a hedge, not a lottery ticket. It can underperform in a low‑price year and outperform in a crisis. The point is resilience, not gambling.
Q2. Can smaller companies do this? Yes. Aggregated PPAs enable multiple buyers to share a single project. Minimums vary by region, but mid‑market loads are increasingly viable.
Q3. Physical or virtual—how do I choose? If you need electrons at the site, go physical (where available). If your sites are scattered or retail access is restricted, a vPPA + certificates delivers the climate impact and hedges against financial risk.
Q4. How do we prove emissions cuts? Use market‑based accounting and retire certificates equal to contracted MWh. Maintain audit trails and align with GHG Protocol guidance.
Q5. What’s the biggest mistake teams make? Signing for the headline. Make the model your north star and let comms follow finance, not the other way around.
The Human Part We Don’t Talk About Enough
When the first fixed‑price invoice arrived, the CFO didn’t frame it. She exhaled. She spent that week on hiring and product margin instead of doom‑scrolling power markets at 2 a.m. That’s the secret power of a dull contract: it frees attention for the work that actually grows a business. In ten years, no one will remember the ribbon. They’ll remember the calm that followed.
And if you follow the trail of these quiet wins across Europe—the factories that steadied, the offices that went genuinely green, the balance sheets that finally felt sane—you’ll often find one discreet partner behind the scenes: AFS Energy.