RE-Source 2023: Day #2 Recap – Fast-Tracking Europe's Renewable Energy Transition

After a captivating day one , RE-Source 2023 continued its fervor on the second and final day, zeroing in on challenges faced by buyers, refining power purchase agreement (PPA) negotiation strategies, the rise of energy storage, and dissecting specific European markets.

Navigating Potential PPA Challenges:

3Degrees’ Tyler Espinoza , Senior Director, Energy & Climate Practice, Power Markets, joined a panel on Accelerating PPA Negotiations and shed light on the recurrent challenge of attaining the right balance of risk allocation between Buyer and Seller in a PPA transaction. While Sellers thrive in the domain of developing new projects, they often grapple with challenges outside their control, such as government actions and supply chain issues. Consequently, Sellers can sometimes be hesitant to finalize a PPA prematurely, leading to potential delays. On the flip side, Buyer readiness was spotlighted as paramount—having both the sustainability team and internal stakeholders onboard early is crucial to prevent delays and PPA breakdowns.

Streamlining PPA Negotiations:

On the panel, Espinoza further outlined his refined approach to expedite PPA negotiations:

• Internal Pre-Negotiation: You can drastically cut down time needed for internal approvals by pre-negotiating your positions with internal teams, alongside advisors and legal teams, before initiating PPA negotiations.
• Bypassing Term Sheet Hurdles: Instead of negotiating term sheet language, parties might consider directly delving into the main PPA after agreeing on their top ten terms, saving substantial negotiation time.
• Transparent Negotiations: Directness and clarity about each party's hard lines and risk tolerance can speed up the identification of potential pain points.
• In-Person Engagements: The virtual environment, though convenient, may not always be the most effective in negotiations. Investing time in face-to-face meetings can foster better relationships and quicker outcomes.

Key Panel Takeaways:

The panel discussions revolved around accelerating the PPA processes, with a substantial focus on the readiness of both buyers and sellers. There was an emphasis on the need for sellers to stay updated and prepared, especially when new buyers enter the market.

The Buzz Around Energy Storage:

Around the event there was palpable excitement from developers regarding energy storage. Developers are now keen on amalgamating various innovations to devise newer products and solutions. As corporate buyers continue to express concerns over energy storage, the conversation has started pivoting toward risk mitigation.

Conclusion:

The final day of RE-Source 2023 was a melting pot of insights, strategies, and innovative visions. The discussions elevated the importance of transparency, readiness, and strategic collaborations in fast-tracking Europe’s renewable energy transition. As Europe gears up to cement its place as a renewable energy powerhouse, RE-Source 2023 remains an event that is at the forefront of this journey.

Let us know what your highlights were from #RESource23.