Private Power Purchase Agreements: Recent Trends And Developments

Private power purchase agreements (PPAs) not only provide buyers with an opportunity to acquire environmental attributes, such as emissions offsets and renewable energy certificates, but can also be used to access certain regulatory incentives, such as investment tax credits and energy cost abatement programs.

What you need to know

• As described in our previous article, private PPAs are contracts between electricity generators and private buyers that allow the generators to hedge against future power price volatility, providing revenue certainty in certain electricity markets. These PPAs also allow the private buyers to acquire environmental attributes, such as emissions offsets and renewable energy certificates, which can be used to offset certain greenhouse gas emissions.