The PPA market, unlike more transparent energy markets such as oil or gas, currently lacks transparency in pricing. This situation results from several factors: the market's reliance on fewer, bilaterally negotiated (over-the-counter) PPAs, rare price disclosures, and diverse deal structures tailored to specific projects.
Pexapark therefore uses pricing models supported by price evidence to determine a fair, market-representative, risk-adjusted reference price, which is representative of a large class of transactions, based on market observations. This includes, but is not limited to PPA transactions, market polling of PPA prices, and price reporting.
Different PPA types such as physical or virtual PPAs have varying associated costs, but generally, grid access or transmission costs as well as sleeving fees are not included in the PPA prices provided by Pexapark. A complete overview of all the different cost and risk components that are included in Pexapark’s PPA price assessments can be found here.
Prices shown on PexaQuote and in the API do not inform the price of individual transactions, but they provide a well-defined, readily observable indication of the price level at which offtakers are expected to enter into the respective transaction. Actual transaction prices may differ due to asset-specific capture prices, credit ratings of involved parties and the structural details of the deal.