Power Purchase Agreement
A Power Purchase Agreement (PPA) is an energy supply contract concluded between an electricity producer and a consumer (company, industrialist, energy supplier, energy distributor, etc.) who undertakes to purchase its energy over a defined period.
There are various structures for PPAs, but they can be classified into four main types: Onsite PPA, Physical PPA, Virtual PPA and Guarantees of Origin PPA.
Choosing the right PPA structure depends on many variables, which should be aligned with the main motivation for companies to engage in PPA.
It is becoming increasingly important as a solution for companies and industrialists in all sectors who wish to secure their energy expenditure over the long term.