As has already been mentioned, CPPAs that refer to offsite production can take the form of either a traditional AAE or a differential contract and can be roughly divided into two groups: (1) Sleeved/Physical CPPA – the energy supply in the same electrical system as the company – and (2) virtual/synthetic CPCs – are only financial transactions without physical transmission (energy title) between the parties. In all cases, the alternator and the end consumer are bound by contract, so that electricity (and in the case of renewable energies, REC) is purchased directly by the end consumer at the generator. As explained above, the two models differ in a number of significant ways, as explained below. When a statutory subsidy to an existing plant expires, AAEs are a means of providing follow-up funding for the operation of the facility. This could include operating costs such as maintenance and leasing. An AAE utility, also called an AAE export, is a bilateral agreement with a local distributor or supply supplier. Modern PPAs contain reduction clauses that are important for planning the expected revenue streams of a project. [21] Liam Stoker, Solar Power Portal, «Standardisation a long way off` from solving the `gulf` in corporate PPA understanding» 31 January 2019, available at www.solarpowerportal.co.uk/news/standardisation_a_long_way_off_from_solving_the_gulf_in_corporate_ppa_under, accessed January 15, 2020. Pacificorp Electricity Supply Contract (PPA) for large power plants (pdf) – Pacificorp`s proposed power purchase contract for power plants with a net capacity of more than 1000 kilowatts – relatively short agreement.

Designed in the context of the U.S. regulatory structure. Traditionally, an electricity supply contract (AAE) is a contract between a government agency and a private utility company. The private company is committed to generating electricity or other electricity for the government agency over a long period of time. Most PPA partners are stuck on contracts lasting 15 to 25 years. Otherwise, however, they can vary considerably in terms of commissioning, reductions, transfer settlement, credit, insurance and environmental rules.