What is a Power Purchase Agreement (PPA) and what does it mean for MMBC?

Welcome to Renewable Energy 101

Today, we're exploring a concept that's crucial in the renewable energy sector: the Power Purchase Agreement (PPA). And what better way to understand PPAs than by examining a real-life example? Let's look at how the Mi’gmawei Mawiomi Business Corporation (MMBC) entered into a groundbreaking PPA with Hydro-Québec in 2023.

What is a Power Purchase Agreement?

A Power Purchase Agreement is like a handshake deal between two parties: one generates electricity using renewable sources (the seller), and the other wants to buy this clean energy (the buyer). It’s an agreement that ensures the energy produced by wind, sun, or water finds a home, while giving the producer a guaranteed buyer at a predetermined price.

The MMBC and Hydro-Québec Partnership

In 2023, MMBC, representing the Mi’gmaq communities, and Hydro-Québec, a leading utility, inked a PPA that set a new standard for collaboration between indigenous corporations and the energy sector. Under this deal, MMBC agreed to supply Hydro-Québec with renewable energy generated from wind power, showcasing MMBC's dedication to sustainable business models and environmental stewardship.

The Essence of the Agreement

This "take-or-pay" agreement, indexed to 30% inflation, ensures that Hydro-Québec purchases the electricity generated by the Mesgi’g Ugju’s’n 2 (MU2) wind project for the next three decades. MU2, a 102 MW wind project set to be located in the MRC d'Avignon, is an extension of the already successful 150 MW Mesgi’g Ugju’s’n wind facility commissioned in 2016.

Why This PPA Matters

1. Economic Empowerment: By securing a buyer for their wind-generated electricity, MMBC ensures a steady revenue stream that supports the economic independence and prosperity of the Mi’gmaq communities.
2. Environmental Sustainability: The agreement underlines both parties' commitment to reducing carbon emissions and advancing the use of clean energy, aligning with global sustainability goals.
3. Predictable Energy Costs: For Hydro-Québec, the PPA means access to renewable energy at a fixed cost, helping stabilize energy prices and reduce reliance on fossil fuels.
4. Supporting Local Green Projects: The deal encourages the development of renewable energy projects within the Mi’gmaq territories, fostering job creation, skill development, and community investment.

The Bigger Picture

The MMBC-Hydro-Québec PPA shows how Power Purchase Agreements serve as a motivation for renewable energy projects. It's a model of how indigenous corporations can play an important role in the green energy transition, contributing to environmental sustainability while promoting economic growth and self-reliance.

Read more about our agreement with Hydro-Québec in last year's official press release.

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