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Finance & Investment

power purchase agreement

PPA

A long-term contract (typically 10-25 years) between an electricity generator and a buyer, locking in price and quantity. Tech companies use PPAs to secure renewable energy and hedge against electricity price volatility. Corporate PPAs have driven massive renewable energy development, though critics note that "virtual" PPAs (financial instruments) don't always result in new generation or reduce the buyer's actual grid emissions.

Referenced in the Book

Discussed in Chapter 6 of This Is Server Country

Related Terms

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