Renewable Electricity Support Agreement

Renewable electricity support agreement is a term that has gained a lot of attention in recent times. With the rising demand for renewable sources of energy, governments and corporations alike are turning towards renewable electricity as a solution to their energy needs. In this article, we will delve deeper into what renewable electricity support agreements are, their benefits, and how they work.

What is a Renewable Electricity Support Agreement?

A Renewable Electricity Support Agreement (RESA) is a contract between the producer of renewable electricity and the purchaser of that electricity. These agreements ensure that the buyer will purchase a specific amount of electricity from the renewable energy producer for a set period, at a fixed price. RESAs are intended to develop and encourage the use of renewable energy and provide financial support to renewable energy producers.

How do RESAs work?

RESAs provide renewable energy producers the stability and support they need to invest in and develop renewable energy projects. Renewable energy producers find it difficult to bring their projects to fruition without a guaranteed market for their electricity. A RESA offers producers a market for their renewable energy, which allows them to secure financing and begin construction. With guaranteed sales, renewable energy producers can sign long term contracts, in turn, increasing their project`s financial viability.

Benefits of Renewable Electricity Support Agreements

1. Encourage the production of renewable energy

RESAs provide a guaranteed market for renewable energy producers, ensuring they have a market for their renewable energy. This helps to encourage renewable energy production, which ultimately increases the availability of renewable energy.

2. Encourages investment in renewable energy projects

The stability provided by RESAs also makes it easier for renewable energy producers to obtain bank financing, making it easier for them to invest in their projects.

3. Reduces energy costs

RESAs lock-in prices for renewable energy, which ensures that the buyer will purchase electricity at a fixed price, even if energy prices rise. This can help to reduce energy costs for the buyer, which can lead to significant savings over time.

4. Promotes sustainability

RESAs promote environmental sustainability by encouraging the use of renewable energy sources, which are cleaner and more sustainable than conventional energy sources.

In conclusion, Renewable Electricity Support Agreements are essential for the growth and development of renewable energy projects. They provide support and stability for renewable energy producers, encourage investments in renewable energy projects, and promote environmental sustainability. As the demand for renewable energy continues to grow, RESAs will play an increasingly important role in the renewable energy industry.