Chapter 01 · Climate & transitionEnergy & Transition
Power purchase agreement (PPA)
Definition
A power purchase agreement is a contract under which a buyer agrees to purchase electricity from a generator under specified terms.
References
This reference provides supporting context for how “Power purchase agreement (PPA)” is defined and used.
Overview
What it means in practice
Power purchase agreement (PPA) should be read as an energy-transition term. Its meaning depends on the technology, market, accounting boundary, contract structure and emissions method being used.
In practice, users should state the boundary, source, measurement basis and evidence. That keeps power purchase agreement (ppa) specific enough for review without turning it into a broader claim.
Why it matters
Power purchase agreement (PPA) matters because energy claims can affect emissions accounting, procurement, infrastructure choices and public communication. Clear wording helps distinguish physical energy use from certificates, contracts and market instruments.
Common misconception
A common error is to use Power purchase agreement (PPA) without naming the grid, timeframe, technology or calculation method. Those details often determine the meaning of the claim.
Review questions
What source, boundary or measurement method gives the term meaning? What evidence supports it? What limitation would change how a reader interprets the claim?
How it is used
In professional practice, “Power purchase agreement (PPA)” helps governments, companies, investors and technical teams describe or assess a contract under which a buyer agrees to purchase electricity from a generator under specified terms. It is commonly encountered in climate strategies, transition plans, emissions inventories, scenarios and investment decisions.
A credible application identifies the relevant methodology, emissions boundary, baseline, timeframe and underlying data.