What is PPA?
A Power Purchase Agreement (“PPA”) is a long-term agreement between the seller of wind energy and the purchaser. Negotiating and signing a PPA is an important step in the development of any wind energy project because it secures a long-term revenue stream through the sale of energy from the project and provides evidence that the energy is needed by the purchaser. Power may be sold through a PPA to a local utility or electric cooperative, a more distant utility, or to a different wholesale or retail customer.
While price terms are often thought of as the most important element of a PPA, typical PPAs include many vital provisions addressing issues such as the length of the agreement, commissioning process, “take-or-pay” or curtailment agreements, early termination rights, construction milestones, defaults and penalties, and ownership of credit flowing to the project owner and power purchaser. Securing a good PPA is often one of the most challenging elements of wind project development.
A Power Purchase Agreement (“PPA”) is a long-term agreement between the seller of wind energy and the purchaser. Negotiating and signing a PPA is an important step in the development of any wind energy project because it secures a long-term revenue stream through the sale of energy from the project and provides evidence that the energy is needed by the purchaser. Power may be sold through a PPA to a local utility or electric cooperative, a more distant utility, or to a different wholesale or retail customer.
While price terms are often thought of as the most important element of a PPA, typical PPAs include many vital provisions addressing issues such as the length of the agreement, commissioning process, “take-or-pay” or curtailment agreements, early termination rights, construction milestones, defaults and penalties, and ownership of credit flowing to the project owner and power purchaser. Securing a good PPA is often one of the most challenging elements of wind project development.
For more details please download a PDF version by clicking here.
No comments:
Post a Comment