Power purchase agreement

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Sustainability - renewables - electricity.


A contract between an electricity generator and a buyer for the sale of green electricity between the two parties.

Potential benefits of power purchase agreements include:

  • Providing a fixed price for energy over the period of the contract;
  • Managing exposures to energy price volatility; and
  • Enabling more predictable cost planning.

This type of contract is sometimes known as a direct PPA, to distinguish it from a Virtual PPA.

See also

External link

Introduction to Power Purchase Agreements - UK Crown Commercial Service