Market Implications of the Power Purchase Agreement Model

1.1. Suppliers

The Power Purchase Agreement model and resulting scale has created not only new customers for traditional design/build solar companies, but also new markets for traditional construction companies wishing to expand into renewable energy. Mondial completes significant marketing activities on behalf of the industry, thus is able to present pre-qualified business opportunities to suppliers.

1.2. Energy Modelling

The focus on energy generated as a revenue source and vital part of the value chain has brought actual energy generation into even sharper focus than before. For example it is clear that there was some industry ignorance about actual domestic cold water temperature seasonal variation. Rising

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summer temperatures result in significantly lower seasonal energy generation as cold water temperatures rise with ambient temperatures.

Fig. 2 — Seasonal variation in production due primarily to rising domestic cold water temperatures

Note that the graph under-estimates this impact with significantly lower ambient temperatures in May over July. Significantly modelling completed with the government’s own modelling software (RETScreen) appears to be under-reporting energy generation by as much as 25% compared with more sophisticated models. This indicates the level of accuracy prevalent in the industry.