Fixed-volume renewable power purchase agreements face a new compliance problem under CBAM. The electricity used to cover production shortfalls may not come from the contracted renewable installation, exposing part of the delivered volume to national default emission factors.
The CBAM framework requires the amount of electricity claimed under actual embedded emissions to be covered by a PPA between an authorised CBAM declarant and a producer located in a third country. This appears straightforward when the contract follows the plant’s actual output. It becomes more difficult under baseload and shaped PPAs.
A wind or solar generator cannot guarantee a fixed hourly profile. When actual production falls below the contracted quantity, the shortfall is normally purchased on the intraday or balancing market. That replacement power may come from coal, gas, hydro or an untraceable portfolio.
The Energy Community Secretariat warns that the portion of electricity delivered under the PPA but not produced by the named renewable installation is expected to face CBAM costs based on the national default factor. The result is an additional and potentially large cost of servicing a fixed-volume agreement.
For a Serbian contract, the default charge was approximately €78.37/MWh in Q2 2026. In Montenegro it was around €73.70/MWh, and in North Macedonia almost €66.77/MWh. Even a relatively small imbalance volume can therefore erode the commercial margin of the entire PPA.
The risk exists regardless of whether the generator or the offtaker assumes profile responsibility. A generator that guarantees the shape may bear the direct replacement cost and CBAM exposure. An offtaker that manages the imbalance may still import electricity whose origin cannot be proven.
A pay-as-produced PPA reduces this problem by limiting contractual delivery to the renewable plant’s actual production. The offtaker accepts volume and profile risk, while the generator avoids sourcing replacement electricity. This structure provides a clearer connection between the installation, metered output and imported volume.
The trade-off is commercial. Industrial buyers and utilities often prefer shaped delivery because it is easier to match with consumption. Pay-as-produced supply requires a separate balancing portfolio, storage, flexible demand or additional contracts.
Battery storage can support compliance by shifting renewable output within the day, but the documentation must still demonstrate that charged energy originated from the qualifying installation. A battery drawing from the wider grid may reintroduce the same traceability problem.
CBAM is therefore changing PPA valuation. The lowest headline price may no longer be the most economical contract once balancing replacements, default factors and verification costs are included. Buyers and generators must price the carbon status of imbalance energy explicitly, rather than treating balancing as a conventional settlement issue.
