Renewable Power Purchase Agreements

Subject – Environment

Context – Renewable PPAs in Andhra, Punjab: Power cos write to Centre

Concept –

Electricity and wind energy contracts are known as “Power Purchase Agreements” or PPAs.
PPAs are long-term contracts to buy renewable energy in agreed volumes and at prices that meet the needs of the generator and the consumer.
These renewable energy agreements provide both parties not only with financially beneficial solutions, but also secure clean renewable energy supplies to the corporates and enable investment in additional renewable energy developments.
The PPA states the obligations of the power producer to produce and deliver power to specified points and further sets out the price at which such power will be purchased.
PPA usually runs for around 20-25 years. The PPA is often regarded as the central document in the development of independent electricity generating assets (power plants), and is a key to obtaining project financing for the project.