What is PPA?

PPA is a long-term electricity purchase agreement where typically, a large electric user or a number of smaller electricity users is suitable purchases a certain amount of electricity from the electricity producer under the contract for example, for 10-20 years.

What is PPA?

PPA agreements mean long-term power purchase agreements where typically a major electricity user or a group of smaller electricity users agree on purchasing a certain amount of electricity from the electricity producer for a price according to the agreement, for example, for 10–20 years.

The number of PPAs concerning renewable energy in the Nordic countries has started to grow rapidly since 2010. PPAs are drawn up for solar and wind power production, however, wind power capacity is significantly higher due to the larger size of projects. PPAs have become more interesting from the buyers’ perspective due to reasons related to emissions reduction and purely for financial reasons. As a result of a fall in renewable energy production costs in an increasing number of countries, the importance of aid schemes is diminishing and the attractiveness of PPAs and their necessity to reduce financial costs is growing from the electricity producers’ point of view.

The first PPA drawn up on wind power production in Finland was published in summer 2018. Elsewhere in the world, the number of PPAs especially on renewable energy has grown strongly in the past few years, and the number of PPAs in Finland is also expected to rise.

Further information about PPAs: What are PPAs? – RE-Source Platform (resource-platform.eu)