Managing your PPA Contracts: Risks to be aware of and clauses to include

Eloise Moench
Marketing Lead

Corporate energy buyers entering Power Purchase Agreements (PPAs) are navigating a mix of opportunities and risks. 

Historically, the energy supply risks inherent in renewable electricity contracts have been managed by utilities, who are very well equipped to deal with them thanks to their market knowledge and diversified clean energy portfolios.

As more companies step into the PPA market, it's crucial for them to understand and manage the associated risks. Without the same expertise or resources as utilities, corporates must educate themselves on potential challenges and strategies to mitigate them. 

The PPA risks energy buyers can often overlook

When buyers are entering into PPA contracts, the main focus tends to be on the price risk associated with the contract. Yet there are many other risks to consider and a crucial one is volumetric risk. 

Volumetric risk in PPAs refers to the uncertainty and potential financial impact arising from the difference between the projected and actual volume of electricity generated and consumed. As PPA’s tend to include intermittent renewable energy sources like wind and solar farms, which are weather-dependent, this can lead to significant variability in the amount of electricity generated compared to the contracted amount.

If the actual generation differs from the expected volume, the financial outcomes are influenced by the prevailing market prices at the time of the mismatch, which can cause market price risks to occur.​

How to Mitigate this Risk

Contractual Clauses

Including specific clauses in the PPA contract that address data availability and accessibility, performance guarantees, and curtailment conditions can help manage volumetric risk. These clauses ensure that both parties are aware of their obligations and the mechanisms in place to handle deviations from expected volumes​.

Real-Time Data Monitoring

Implementing monitoring systems can help track the performance of the PPA asset and detect volumetric risks early.  By ensuring you have access to the data you need to track volumetric risk, you have enough transparency over the PPA performance for quick adjustments to mitigate potential losses.

How Flexidao can help

Flexidao can help you with the monitoring of your PPA contracts and data tracking, so you can ensure you are mitigating a variety of risks. 

Here’s how:

1. Compliance and EAC Management

Managing EACs and ensuring compliance with carbon reduction targets requires meticulous tracking and documentation. Flexidao’s platform handles this efficiently, tracking changes in EAC portfolio balances, maintaining historical records, and providing timely documentation for audits and stakeholder communications. This ensures compliance and transparency, reducing the administrative burden on your team.

2. Internal Reporting

Flexidao’s platform offers comprehensive dashboards that provide detailed insights into cash flow performance and projections of your PPA projects. Our solution simplifies the calculation of financial outcomes, making it easier to generate accurate reports and forecasts. This enables you to manage liquidity risks confidently and make informed decisions.

3. Risk Mitigation

Flexidao’s platform monitors the availability and outage reasons of the assets (e.g. the wind or solar farm) related to your PPA contract, validating hourly generation volumes to ensure contract terms are met. By categorizing outages into excused and non-excused periods, we help you enforce compliance and mitigate performance and volume risks. 

4. Automated  Data Collection for KPI and Risk Monitoring

Many energy buyers spend excessive time on manual tasks associated with data collection and standardization. Flexidao automates these processes, freeing up valuable time and reducing the risk of errors. With real-time updates and accurate data, you can focus on strategic decision-making rather than administrative tasks.


Flexidao’s platform is tailored to meet the specific needs of corporate energy buyers who manage a portfolio of PPA contracts. By automating data processes, simplifying reporting, and ensuring compliance, our platform helps you manage risks, optimize financial performance, and make strategic decisions with confidence. 

Discover how Flexidao can transform your energy procurement and management by contacting our team today.