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Energy
Power Purchase Agreement (PPA)
A PPA is a long-term contract to buy electricity directly from a power generator at a fixed price.
Definition
A Power Purchase Agreement (PPA) is a long-term contract (typically 10-25 years) between a power generator and a buyer (utility, corporation, or datacenter) to purchase electricity at a pre-agreed price. PPAs are critical for financing renewable energy projects because they provide revenue certainty. For datacenters, PPAs enable: (1) Long-term renewable energy supply at fixed costs, (2) Hedge against electricity price volatility, (3) Additionality — funding new renewable capacity. Harch Corp uses solar and wind PPAs to power its datacenters with 100% renewable energy.
Related Keywords
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Related Terms
Renewable Energy
Renewable energy comes from natural sources that replenish — solar, wind, hydro, geothermal.
Solar Energy
Solar energy is power generated from sunlight using photovoltaic panels or concentrated solar power.
Carbon Intensity
Carbon intensity measures CO2 emissions per unit of electricity consumed, expressed in gCO2/kWh.