BAASLAB Climate Change Solutions
Energy

Power purchase agreement

A power purchase agreement, or PPA, is a long contract between a generator and a buyer setting the price, the volume and the term for electricity. It is what makes a project financeable, because it turns expected generation into contracted revenue.

Terms commonly run for many years, which is why a buyer looks closely at whether the generator can still be there at the end of it.

Steady output makes a better PPA than large peak output, which is most of the argument for combining sources and adding storage.

Related terms

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