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?
The first PPA contract on wind power production in Finland was released in the summer of 2018. The rest of the world in particular, the number of PPAs for renewable energy has increased in recent years. Also in Finland, PPA contracts are expected to increase.
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.
The PPA agreement provides both parties with predictability and stability. For a power generator (ie. a seller), a long-term purchase agreement provides certainty about the price level of electricity generated by the wind farm and thus creates better opportunities for the realization of the investment. For the electricity purchaser, the contract guarantees the price of the purchased electricity.
Information on long-term electricity purchase agreements (eg. contract types, pricing models, risks and risk management, ancillary contracts and legislation) has been collected extensively in the PPA material package (in Finnish) ordered by FWPA. The material has been compiled by ÅF in January 2019.
Download the material package here
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