A Power Purchase Agreement (PPA) is both a legal and a
commercial document between a power producer as seller and the
wholesale energy purchaser, as buyer/offtaker. The PPA is at the
heart of any power generation project.
The PPA will state the obligations of the power producer to
produce and deliver power to specified points and will further set
out the price at which such power will be purchased.
The PPA will also contain terms relating to interconnection,
metering, invoicing and payment, scheduled outages, force majeure
exceptions(actual and potential transmission constraints and
interruptions), dispute resolution and possibly buy-out options.
Other operational key issues may also be addressed in a PPA like
operational targets, dispatch procedures, commissioning and
testing, and repair and maintenance.
