Long-term energy contracts

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What is a Physical Power Purchase Agreement?

It is an electricity purchase agreement between two Market Participants, such as a Producer and a Direct Market Consumer. In this contract, both parties agree on a fixed volume of energy, a defined price, and a specified duration.

These contracts are managed through the participants’ Scheduling Units and registered with Red Eléctrica de España (REE) as Bilateral Contracts. REE Contratos Bilaterales

Unlike PPAs (Power Purchase Agreements), a CBF is designed to minimize curtailment,  reductions in generation caused by overproduction. curtailment 
as set out in REE Operating Procedure 3.2. Procedimiento de Operación de REE 3.2.

Terms and conditions are fully flexible and agreed exclusively between the parties, without being subject to standard market rules. Energy is exchanged on an hourly basis between the Direct Market Consumer and the Producer.

CBF Operating Conditions

To enter into this type of contract, the parties must comply with the following requirements:

Be a Market Participant, such as a Direct Market Consumer or a Producer.
Notify the System Operator of the electricity exchange specified in the contract.

Key Advantages of a CBF

It is the future

Entering into a physical forward purchase and sale contract (CBF) is one of the benefits offered by the wholesale market. Planning energy costs over the long term—whether at a fixed price or one that is gradually adjusted—is one of the most attractive options for both consumers and producers.

Through CBFs, both producers and consumers can stabilise their energy prices, thereby reducing volatility in the wholesale market (pool). The future lies in actively balancing positions within the market.

Configuration

A CBF is composed of four key elements: duration, price, non-exclusive collateral, and agreed flexibility. URBENER acts as the central counterparty to this agreement.

Volume

The agreed energy is defined as baseload and must be firm and precise on the demand side. Generation is governed by the specific rules of the CBF as set out in its Operating Procedure.

Timing Advantage

A CBF is not a bankable PPA, which typically requires timelines that do not align with a company’s strategic management needs. Its timing conditions are flexible and can be adapted during structuring.

Price

At URBENER, we analyze the optimal pricing structure to meet production and consumption requirements over time. Our best proposal is flexible and shared between the parties.

Guarantees

As the contract is not bankable, collateral requirements are less stringent and are agreed between the parties based on their specific conditions.

Innovation

An innovation project developed by URBENER: a platform for the offering, contracting, and management of physical bilateral contracts between Direct Market Consumers and electricity producers, aimed at maximizing value for all parties.

Who can execute a CBF?

 

In non-organized markets, Circular 3/2019 of 20 November, issued by the CNMC“Circular 3/2019, de 20 de noviembre, establishes that wholesale electricity market participants may enter into bilateral contracts with physical delivery of electricity (CB).

These contracts require that the agreed energy volumes and their corresponding nominations be reported to the System Operator, detailing the relevant time periods and the associated generation and consumption points, for proper integration into system operations.

Renewable energy aggregation through long-term contracts.

Directly from producers to direct market consumers, tailored to your energy needs.

A platform for managing aggregated energy purchase agreements and flexible balancing services.

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