Renewable energy supply agreements (RESA) are an increasingly popular way for businesses to obtain a reliable and sustainable supply of energy. These agreements are also known as Power Purchase Agreements (PPA) and are contracts between energy buyers and renewable energy providers.

In simple terms, a renewable energy supply agreement is a legally binding contract that dictates the terms of the energy supply between the two parties. The agreement outlines the type of renewable energy that will be provided, such as wind or solar power, the quantity of energy, and the pricing structure.

The goal of these contracts is to provide businesses with a stable, long-term source of renewable energy at a fixed price. This helps both parties protect themselves from market volatility and forecast their future energy costs accurately.

The agreement typically lasts anywhere from 10 to 20 years, with renewable energy providers building and operating energy plants to supply energy for the duration of the contract. In some cases, businesses are a part owner of the renewable energy plant.

Businesses that sign renewable energy supply agreements have a couple of options when it comes to how they will receive their renewable energy. The first is a physical delivery option where they receive the energy directly from the renewable energy provider. The second is a financial settlement option, where the energy is delivered to the grid, and the business receives a credit for the energy produced.

Renewable energy supply agreements come with several benefits for businesses that opt for them. Firstly, it allows businesses to meet their sustainability goals by reducing their carbon footprint through the use of renewable energy. Secondly, it provides a stable and predictable energy cost, which helps in budget planning.

In conclusion, renewable energy supply agreements are a vital tool for businesses to procure a long-term and stable source of renewable energy. These agreements help businesses reduce their carbon footprint while protecting them from volatile energy markets. The many benefits of renewable energy supply agreements make them an attractive option for businesses looking to achieve sustainability goals and control energy costs.