What is a Power Purchase Agreement (PPA) and what are its key terms?

A PPA is a long-term contract between renewable generator and buyer (utility or corporate). Key terms: price structure (fixed, escalating, indexed to market), contract duration (10-25 years typical), delivery point (busbar, hub, delivery node), energy and capacity provisions, curtailment treatment (who bears risk), performance guarantees (availability, capacity factor), RECs allocation, termination provisions, credit/security requirements, and change in law provisions. PPAs provide revenue certainty enabling project financing. Corporate PPAs (virtual PPAs) are financial hedges without physical power delivery.