Power Purchase Agreement (AAE) – Short form agreement for small energy projects in Namibia Standard-contract to purchase electricity in abbreviated version for small energy projects in Namibia. This is part of a series of documents, including a fuel supply agreement, found at the Nib Electricity Control Board. The FiT mechanism includes renewable energies, namely biogas, biomass, mini-hydro hydro geothermal and solar energy, which is no longer proposed. This concept is in line with the introduction of solar power generation in Malaysia in the sense of grid parity, where the cost per kilowatt hour (KWh), calculated on the principle of level energy costs (LCOE), is the same as the cost per KWh-electricity produced from conventional fuels, namely coal and gas. PPVs are purely financial transactions (not an electricity sales contract) in which the company`s purchaser does not purchase the physical electrons produced by the generator and is not responsible for them. VPPA is essentially a form of financial hedging in which fixed-price cash flow is exchanged for variable cash flows and renewable energy quotas. They can be structured as a swap or option agreement, including sale/call options offering a price collar. The generator sells the electricity it produces on the wholesale market, where the production plant is located, and the buyer continues to buy his energy at the wholesale market where the buyer is – and these two markets are often different. However, the parties include a VPPA to ensure price security under the agreed structure and to sell UCs to the company`s purchaser. In this way, synthetic PPAs decouple the physical flow of electricity from the financial flow.
The basic elements of a VPPA transaction are:  From the boiler room to the meeting room: optimizing the energy mix of companies – renewable energy can turn energy risks into added value, EY Report, 2014, Available at: www.ey.com/publication/vwLUAssets/EY_-_Optimizing_the_corporate_energy_mix/$FILE/EY-Optimizing the corporate-energy-mix.pdf, accessed January 2, 2020.  Website SSE Green Electricity, available at www.ssebusinessenergy.co.uk/solutions-for-business/green-energy/, available January 2, 2020.