{"id":133409,"date":"2022-12-11T13:35:31","date_gmt":"2022-12-11T13:35:31","guid":{"rendered":"https:\/\/lightsourcebp.staging.1int.co.uk\/?page_id=133409"},"modified":"2025-11-26T10:53:09","modified_gmt":"2025-11-26T10:53:09","slug":"proxy-generation-ppa","status":"publish","type":"page","link":"https:\/\/lightsourcebp.staging.1int.co.uk\/us\/energy-solutions\/proxy-generation-ppa\/","title":{"rendered":"Proxy generation PPA"},"content":{"rendered":"
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Proxy generation PPA<\/h1>\n <\/div>\n <\/div>\n <\/div>\n\n
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What is a proxy generation power purchase agreement?<\/h2>\n

A proxy generation power purchase agreement (pgPPA) is an innovative renewable energy contract structure primarily intended to manage weather related risk. A pgPPA is similar to a virtual power purchase agreement (VPPA), except it settles energy on a proxy generation index rather than actual production of the solar and energy storage project (i.e., metered generation).<\/p>\n

Proxy generation is an hourly index predetermined by a mathematical formula that estimates how many MWh should have been produced by the solar and storage energy system. It\u2019s based on the solar irradiance as measured by the project\u2019s operational and meteorological measurements, along with a rate of efficiency. This formula, along with underlying assumptions, is mutually agreed upon by the buyer and Lightsource bp before execution of the power purchase agreement.<\/p>\n

The primary difference between a proxy generation PPA and a typical virtual PPA is that the proxy generation PPA settles based on the proxy generation rather than the actual output of the project. As with a VPPA, a pgPPA is often referred to as a \u2018contract for differences\u2019 as it is a financial contract where the buyer does not physically receive the electricity. The buyer agrees to purchase a solar plus energy storage project\u2019s output and associated Renewable Energy Credits (RECs) at a set fixed price. Lightsource bp settles based on the comparison of market price and the contract\u2019s strike price. When the market price is greater than the fixed pgPPA price, Lightsource bp passes the upside to the energy buyer. When the market price is less than the fixed pgPPA price, buyer must true up or pay Lightsource bp the difference.<\/p>\n\n <\/span>\n <\/div>\n <\/div>\n <\/div>\n\n

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Available products with a proxy generation PPA:<\/strong><\/p>\n