EMC Working Papers

On Thursday 24 November 2022, Renault signed a contract with Voltalia to supply 350 MW of renewable energy over 15 years from 2027, which should account for half the company’s electricity consumption. This type of contract, also known as a corporate Power Purchase Agreement (cPPAs), is an unprecedented commitment in France in terms of power. On the same day, Engie announced a contract to purchase 100MW with Google in the United Kingdom for 12 years from the Moray West offshore wind project off Scotland. Whilst solar and wind remain dominant, contracts are now emerging for biogas, geothermal, and even hydrogen.

In the current race for carbon neutrality and a context of extremely high and volatile power prices, companies are more than ever urged to hedge and stabilise their electricity supply, both in price and volume, over the long term. In this article, we will investigate how risk hedging, through cPPAs and weather derivatives, will play a key role in addressing the energy trilemma in the next decades, enhancing access to affordable, secured, and sustainable energy.

Research Topics: Climate Change and the Environment Sustainability and Corporate Social Responsibility