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Power Purchase Agreement (PPA) - Wind Energy
Overview
The Power Purchase Agreement (PPA) should be signed before construction starts. Under a PPA, off-takers agree to buy power from the project company for a set period at a certain rate. The PPA is obviously the most important agreement to be negotiated for the project as it dictates the future revenues of the project, It is crucial that the PPA does not penalize the project company if the power supply is affected by low wind levels (cp. e.g. energy in vietnam&cntnt01returnid=53&mact=News,cntnt01,detail,0 GTZ Wind Energy Vietnam).
Aspects of Power Purchase Agreement (PPA)
Pricing (Structure)
Term and Termination
Transmission
Cost & Risk Allocation
Examples
- see: GTZ 2009: Development of Implementation Strategies for a Regional Regulatory Action Plan (RRAP) for the Western Cape. http://www.gtz.de/de/dokumente/gtz2009-en-regional-regulatory-action-plan-western-cape.pdf, Power Purchase Agreement pp. 42
Further Information
