Power Purchase Agreement

A power purchase agreement is a contract between two parties, one who generates electricity for the purpose (the seller) and one who is looking to purchase electricity (the buyer). The PPA defines all of the commercial terms for the sale of electricity between the two parties, including when the project will begin commercial operation, schedule for delivery of electricity, penalties for under delivery, payment terms, and termination. A PPA is the principal agreement that defines the revenue and credit quality of a generating project and is thus a key instrument of project finance. There are many forms of PPA in use today and they vary according to the needs of buyer, seller, and financing counterparties.

Read more about Power Purchase Agreement:  Background, Regulation, Where Appropriate, Financing, Operation and Metering, Example Contracts, See Also

Famous quotes containing the words power, purchase and/or agreement:

    What breadth, what beauty and power of human nature and development there must be in a woman to get over all the palisades, all the fences, within which she is held captive!
    Alexander Herzen (1812–1870)

    Riches are valuable at all times, and to all men; because they always purchase pleasures, such as men are accustomed to, and desire: Nor can any thing restrain or regulate the love of money, but a sense of honour and virtue; which, if it be not nearly equal at all times, will naturally abound most in ages of knowledge and refinement.
    David Hume (1711–1776)

    Truth cannot be defined or tested by agreement with ‘the world’; for not only do truths differ for different worlds but the nature of agreement between a world apart from it is notoriously nebulous. Rather—speaking loosely and without trying to answer either Pilate’s question or Tarski’s—a version is to be taken to be true when it offends no unyielding beliefs and none of its own precepts.
    Nelson Goodman (b. 1906)