Complex energy contracts: clarifying end-to-end process, roles and responsibilities

For local offtake & CPPA contracts

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BDO Belgium

These past years, local offtake contracts and CPPA (Corporate Power Purchase Agreement) contracts have gained popularity in the energy industry.  
These types of energy contracts allow B2B customers to fully or partially benefit from the energy produced by a wind turbine. Different variations of CPPA contracts can be made up. Among other things, this depends on the distance of the wind turbine to the B2B customer’s location, or the amount of generated energy consumed. 
As the awareness about local offtake and CPPA contracts in the energy sector rose, so did the likelihood of more of these contracts being concluded. 
However, since those contracts are quite new, the market allows for a variety of contract parameters:  
  • Pricing: fixed or variable pricing, click pricing, etc 
  • Possibility of shared balancing cost 
  • Stopability of the wind turbine in case of market overproduction 
  • Treatment of Green Certificates and Guarantees of origin 
  • … 
All these different contract parameters pose challenges in effectively managing the diversity of contracts on a day-to-day basis. 
One of BDO’s clients, an important company in the energy sector, was faced with the increased demand for these types of contracts. As there was no defined process with formal roles and responsibilities set in place, more and more issues with managing these contracts emerged.  

Challenge

For this company, this increased demand gave rise to several pressing challenges. Which in time led to the following issues:  

A clear structure and guidelines were needed

A rise in complexity from the inherent challenges of the energy industry 

  • designating the Balancing Responsible Party,  

  • designating the party supporting the balancing cost,  

  • Making decisions around the stopability of the wind turbine 

  • … 

Operational difficulties due to the involvement of multiple parties and systems within contract management  

Manual treatments and parametrisation of databases on a significant scale 

Lack of understanding about the roles and responsibilities of employees regarding those contracts 

Insufficient communication among colleagues, which led to loss of information 

BDO’s Tailored Approach & Solutions 

To address these challenges, our experts from BDO Management Consulting proposed a comprehensive solution for the company ;  providing a tailor-made and pragmatic answer to the issues mentioned above.  

In summary, the following actions were taken to tackle these challenges: 

  • Designing an end-to-end process, spanning from prospection to day-to-day operations management 

  • Clarifying and enlightening team roles and responsibilities 

  • Evaluating and improving process-related issues 

  • Analysing all contract varieties and their impact on the operations 


  • Creating a consolidated and detailed checklist with the required actions for both contract setup and day-to-day contract management, per party 

energie case

Impacts and results

After developing and implementing the processes together with the company, there were several positive outcomes. These eventually led to improved management and follow-up of local offtake and CPPA contracts. 

A summary of concrete results: 

  • A well-defined end-to-end process was put in place to boost operational efficiency. 

  • The members of each team now clearly know their roles and responsibilities. 

  • There’s a coherent overview of the daily actions required when setting up and managing contracts, taking into account the diverse set of possible parameters. 

  • Other areas of improvement were presented so the client can further enhance their processes and systems surrounding local offtake and CPPA contracts.

  



Wondering how the contract management and follow-up of your energy company can improve with our personal and pragmatic solutions? 

Contact BDO experts Marie d’Hollander, Michel Neirinckx or Grégory de Streel for more information. They’ll gladly help you out with their in-depth expertise and sector-specific knowledge.