CPPAs: A new era of corporate buyers

Historic buyer profiles

Historically, CPPA buyers were typically large corporates with substantial, predictable electricity demand, as minimum offtake thresholds were required to make projects commercially viable. Long-term commitments, often spanning 10–15 years, provided revenue certainty for developers and investors.

Today’s active sectors

The sectors most likely to contract nowadays are tech, data centres, utilities and manufacturing. This is because each generates large, predictable energy demand alongside strong creditworthiness. They also all adhere to clear decarbonisation mandates. By procuring energy through a CPPA, these organisations will be able to better control costs and improve sustainability for their largest supply chain component.

Why the buyer base is expanding

Growing corporate focus on ESG commitments and energy price risk mitigation has expanded the CPPA buyer base beyond large energy-intensive corporates. As well as this, the rapid growth of wind and solar development pipelines has increased competition among generators to secure offtake agreements. This has driven the adoption of more flexible deal structures that better accommodate smaller and more diverse buyers.

Furthermore, and on the whole, contract lengths are reducing. The amount of board-level red tape necessary to sign a 10-15 year contract has been a barrier to entry for many organisations. With five-year CPPAs, for example, internal governance isn’t as much of a sticking point.

Generators are more open to discussing off-take without requiring cast-iron bankability, too. They need more demand for their increased supply – particularly given the uncertain future of CfD availability.

This all contributes to greater CPPA accessibility – and for a wider range of consumers.

Barriers still to overcome

Despite growing momentum, several barriers still limit wider market adoption for CPPAs. In its recent call for evidence, the Government acknowledged that credit requirements, contractual complexity and limited internal capability remain key obstacles preventing CPPAs from becoming mainstream procurement tools.

Credit is one of the biggest challenges. Renewable developers and lenders require long-term revenue certainty, meaning buyers often need strong balance sheets or costly credit support arrangements. In response, the Department for Energy Security and Net Zero (DESNZ) is exploring potential support mechanisms, including guarantee structures and other interventions designed to reduce credit risk and improve market access.

The enablers: what’s unlocking the next wave of CPPA buyers

Encouragingly, several market developments are making CPPAs more accessible to a broader range of buyers.

Aggregation

With aggregation, multiple buyers can combine their demand to reach the scale required for a project. This opens access to CPPAs for mid-sized organisations that may not have sufficient demand individually. Aggregation also allows participants to share risk across a broader buyer group, although it can create challenges around contract standardisation and alignment between counterparties.

Multi-asset portfolios

Buyers are increasingly moving away from single-asset CPPAs towards diversified renewable portfolios that combine different technologies and generation profiles. This approach reduces intermittency risk, delivers smoother and more predictable generation, and allows buyers to tailor supply more closely to their consumption patterns.

Standardisation

The CPPA market continues to shift towards more templated contracts and repeatable deal structures, with advisors and intermediaries playing an important role in simplifying transactions. Greater standardisation helps accelerate deal timelines, lower transaction costs, and build confidence among new market entrants, as CPPAs become more familiar and easier to understand as a procurement product.

Consumer focus

While the CfD scheme’s still operational, there’s just one more CfD ‘allocation round’ – invitations to bid with renewable asset development proposals – for developers to build and commission assets before 2030. Consumers would benefit from agreeing a deal involving existing – not just built, but operational – generation assets.

As only new assets are eligible for CfD – and they’re more expensive to contract with due to perceived ‘additionality’ – existing assets are more readily available for CPPAs. This suits generators too – without CfDs, CPPAs are the next best way of securing stable revenue generation from their renewables investments.

The next generation of CPPA buyers will likely be smaller, aggregated, and supported by intermediaries. For a broader range of organisations, CPPAs are becoming a realistic route to both price certainty and progress on decarbonisation.

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