PPAs are veryimportant in ESG

By: Trademagazin Date: 2024. 11. 14. 11:10

Long-term energy purchase contracts, or PPAs, play an increasingly important role in companies’ sustainability and energy strategies, especially in the field of green transformation. However, in order for a company to make a well-informed decision, many factors must be taken into account, such as choosing the right type of PPA (physical or virtual, onsite or offsite) and dealing with related legal and accounting issues.

At the PwC business breakfast, experts including Tamás Gábor Kovács, Péter Heronyányi, Péter Gyenes and dr. János Faragó analyzed the key aspects of the green transformation and provided practical guidance. Kovács emphasized that it is essential to develop a well-thought-out ESG strategy, which includes setting short- and long-term goals, such as achieving energy efficiency or even complete carbon neutrality. By following ESG goals, companies can enjoy not only environmental protection aspects, but also economic and social benefits.

Péter Gyenes drew attention to the challenges of the “energy trilemma”, which means finding a balance between energy security, accessibility and sustainability. PPAs play a key role in this, as they promote the use of renewable energy and the verification of its origin. The experts explained in detail the different PPA types and their advantages: the physical PPA provides direct energy purchase, while the virtual PPA provides the financial cover.

On the legal and accounting aspects of PPA constructions, Dr. Faragó and Heronyányi detailed that these long-term contracts can have significant effects on the company’s financial reporting and legal compliance. Such decisions require a thorough market, legal and energy analysis, so that companies can ensure a sustainable energy supply in the long term, while improving the efficiency of their energy management and reducing their emissions.