A corporate PPA is a ten- to fifteen-year contract to buy the output of a specific wind or solar asset. It is also six to eighteen months of negotiation with two legal teams, which is why the buyers are all very large companies and the price is whatever the last one agreed. Standardise the contract and the negotiation collapses into an order.
The demand is real and growing — corporate renewable procurement is now a board-level commitment at thousands of companies. The mechanism for meeting it has barely changed: find a developer, hire lawyers, and negotiate a bespoke long-term contract from a blank page.
The legal and advisory bill for a PPA is broadly the same whether the offtake is 20 GWh a year or 500. Below a threshold the deal simply does not clear its own costs, so mid-size buyers either give up or buy unbundled certificates and hope nobody asks about additionality.
Published PPA indices are survey assessments built from what advisers say they have seen. They are directionally useful and they are not transaction prices. A buyer cannot tell whether the number in front of them is good, and neither can the developer's board.
A solar farm generates when the sun is up; a factory consumes on its own schedule. The mismatch between the two, and who wears it, is where most of the economics sits. It is settled in a clause rather than in a price, which makes two PPAs at the same headline £/MWh entirely different transactions.
Because small buyers cannot transact directly, someone assembles them into a syndicate large enough for a developer to bother with. That is a useful service, and the margin on it is invisible to the people paying it.
Nothing here needs a new financial instrument. It needs the existing one written down the same way twice, at which point a price can be discovered rather than negotiated.
Fix the term, the settlement mechanism, the curtailment treatment and the credit terms, and what remains is a price and a volume. That is an order. Everything the market currently spends eighteen months on becomes a document you read once rather than draft each time.
Baseload, solar-shaped and as-generated blocks trade as different instruments with different prices. The cost of profile risk stops being buried in a negotiated adjustment and becomes the visible spread between two books — which is the honest way to price it.
A monthly or quarterly uncrossing per delivery year produces real prices for a defined product across the curve. Developers get a bankable signal, buyers get a budget line, and both stop paying an adviser to guess.
When entering the market costs an order rather than a legal programme, the addressable set of buyers expands by an order of magnitude. That is the commercial argument for standardisation, and it is why the sector keeps trying.
An iceberg order shows a peak and hides the rest, while contributing its whole volume to the auction price. A developer can bring a full project to market without telling every competitor exactly how much is unsold.
Long-dated instruments, scheduled auctions per delivery period, and credit limits that bind before an order reaches the book. The engine treats a 2031 delivery-year block the same way it treats an equity — the tenor lives in the instrument definition, not in the matching path.
| Setting | Typical starting point |
|---|---|
| Instrument | Technology × region × delivery year × delivery block |
| Lot size | 1 MWh, or a 1 MW-year strip |
| Price | Currency per MWh, outright or as a spread to the wholesale forward |
| Sessions | Monthly or quarterly call auction per delivery year |
| Validity | GTD, so an order can rest across several auctions during approval |
| Risk | Notional and open-position limits per counterparty, set from credit |
| Settlement | Netted per settlement period across the delivery schedule |
Scheduled call auctions per delivery period with an Indicative Equilibrium Price through the call, and GTD orders that rest across several auctions while a buyer's board works through approval.
Read more →04 · coreNotional and open-position limits per counterparty at clearing-member, firm and client level. On a ten-year obligation this is the control that decides who is allowed to bid at all.
Read more →05 · post-tradeNetting per participant and settlement period across a long delivery schedule, fees per trade, and enriched trade-capture records for the contract administration downstream.
Read more →06 · channelHTTP/JSON for the trading desks and a FIX 4.4 gateway for the utilities and banks that already run an OMS — the same validated path and the same limits either way.
Read more →The matching is the easy half and it is not the reason this market does not exist yet. Everything below has to be true before a single order is worth entering.
Every claim on this page depends on counterparties signing the same paper without redlining it. Producing that document, maintaining it, and getting developers, corporates and their lawyers to accept it is a multi-year industry effort. A trading venue cannot standardise your contracts and should not pretend the hard part is the order book.
A pre-trade limit stops an order. It does not make a counterparty good for a ten-year obligation. Collateral, parent guarantees, letters of credit or a central counterparty with a default fund — one of those has to exist, and building it is a capital and risk-management project rather than a software one.
Physical delivery happens against a grid that curtails, prices negatively, and charges for imbalance. Who bears each of those is contract design, and getting it wrong makes the traded price meaningless. Mehrex settles the traded obligation; the electricity system does what it does.
The renewable claim usually travels as a guarantee of origin or equivalent certificate issued in a national registry. Bundling it with the power, transferring it on settlement, and retiring it correctly is registry integration you build — and it interacts with the certificate market on its own page.
A standardised, financially settled, exchange-traded power contract is a derivative in most jurisdictions, with position reporting, venue authorisation and possibly clearing obligations attached. Establish that before you design the product, because the answer changes what you are allowed to build.
Corporates care whether a PPA sits on balance sheet, whether it qualifies for hedge accounting, and what it does to reported earnings. A more tradable contract can make that treatment worse. Their finance function will ask before their sustainability function signs.
The tenor is part of the instrument definition, not the matching path — the engine matches a delivery-year block the same way it matches anything else. What long tenor really changes is credit, which is handled by pre-trade limits at clearing-member, firm and client level and by whatever collateral arrangement sits behind them.
By making it a separate instrument rather than a clause. Baseload, solar-shaped and as-generated blocks have their own books and their own prices, so the cost of profile is the observable spread between them instead of a negotiated adjustment nobody outside the deal can see.
No. Mehrex supplies the market mechanics — instruments, sessions, matching, pre-trade risk, clearing and the audit trail. The standardised contract that makes those mechanics usable is an industry document, and producing one that counterparties will sign unamended is the larger part of the programme.
Energy-saving certificates, RECs, guarantees of origin and carbon credits — instruments defined by paper, priced today by survey.
Read the page →Energy & environmentalNew, sub-national and sectoral cap-and-trade schemes, where the cap exists and the market does not.
Read the page →Precious metalsAn app that sells sub-gram quantities of gold to retail buyers, run as a real order book instead of a dealer’s quote.
Read the page →A live demonstration runs about an hour: the order book, the Control Panel, an auction uncrossing, and a replay of the journal that produced it.