PPA Greenwashing or Financial Incentives for Investments in Offshore Wind Power? A qualitative study on power purchasing agreement and its effect on investment decisions and corporate image in the offshore wind power industry

Abstract

The government of Sweden is currently looking to expand one of the unexploited natural resources, offshore wind. Offshore wind power has for several years been stagnated in terms of production, and the funding of projects has been one of the major issues. Getting bank loans with a lower interest rate demands a steady cash-flow. PPA has increased substantially in the last few years within renewable energy projects, as a way to show investors an income for many years. The purpose of the thesis is therefore through interviews with relevant stakeholders in the industry, to investigate PPA’s possible role in expanding offshore wind power in Sweden and the effect it can have on corporate image. Previous studies within the subject are used along with empirical results to discuss and analyze the research questions. The thesis concluded that PPA has a role to play in future investment decisions, but it will depend on several aspects, with three of them being: 1) If companies can avoid using PPA, they will. 2) The development of spot market prices will determine whether it is worth the risk of PPA. 3) Depending on the demands from the shareholders of the producing company, PPA might not be of interest. Furthermore, with the current electricity system, if producing companies allocate and produce the correct amount of renewable electricity onto the market it is not greenwashing and if they are using PPA with a guarantee of origin, they can claim to be 100 percent renewable without any real legitimacy problems.