A Power Purchase Agreement (PPA) is a long-term contract between a power generator and a utility or commercial buyer for the supply of electricity at an agreed tariff over a specified term. Key commercial terms include: the scheduled generation quantum and the consequences of shortfall; deemed generation provisions compensating the generator for curtailment by the buyer; the tariff structure and the mechanism for tariff revision; the change in law provision allocating the risk of regulatory changes; payment security arrangements; and termination payment provisions establishing what each party receives if the PPA is terminated early.
