Microsoft is offering volume firming agreements (VFAs) that could reduce the risks associated with renewable energy power purchase agreements and encourage their take-up by smaller corporate buyers. The VFA transforms fluctuating prices from renewables' varying output into a stable and slightly higher price, which is guaranteed by a third-party insurer. In an interview at Microsoft's Redmond campus, CEO Satya Nadella said he was excited about the potential of VFAs.
Microsoft is offering volume firming agreements (VFAs) that could reduce the risks associated with renewable energy power purchase agreements and encourage their take-up by smaller corporate buyers. The VFA transforms fluctuating prices from renewables' varying output into a stable and slightly higher price, which is guaranteed by a third-party insurer. Through analysis of energy markets and weather variations, this third party can then ensure delivery of electricity generated from renewables throughout the day at what would usually be a lower price than fossil fuel-generated power.