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What is a PPA?

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Power Purchase Agreements (PPAs) Explained

Related Terms

Bundled
Energy Attribute Certificate (EAC)

Power Purchase Agreements bind electricity buyers to specific generation facilities through contracts spanning 10-25 years, occasionally longer, allowing for long term hedging and predictability regarding the cost of power. Physical PPAs deliver electricity, typically via the grid. Financial PPAs (termed virtual PPAs or contracts for differences) settle the differential between contract strike price and wholesale market indices. Renewable PPAs are contractual instruments under market-based Scope 2 because environmental attributes transfer: typical PPA structures explicitly include certificate transfers.

PPA Definition

Noun
Global
Procurement
Updated on
April 11, 2026
Pronunciation of Power Purchase Agreement (PPA) Using IPA Characters

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