PPAs are critical components of the global electricity sector. They are a widely used mechanism for procuring power by establishing a contract between a seller (or generator) and a buyer (an offtaker, often a utility) of power. As power projects are capital intensive, successful projects need to attract competitive rates of financing to lower costs and ensure financial viability. The lower the risk investors see in a project, the cheaper the financing tends to be for that project. If well-structured, PPAs offer certainty for buyers as well as sellers, protecting them from volatility in energy prices by “locking in” the […]
