{"id":30017,"date":"2025-08-14T21:00:43","date_gmt":"2025-08-14T21:00:43","guid":{"rendered":"https:\/\/www.greenyellow.com\/blog\/2025\/08\/14\/quest-ce-quun-power-purchase-agreement-ppa\/"},"modified":"2026-01-20T09:09:49","modified_gmt":"2026-01-20T09:09:49","slug":"quest-ce-quun-power-purchase-agreement-ppa","status":"publish","type":"post","link":"https:\/\/www.greenyellow.com\/en\/blog\/quest-ce-quun-power-purchase-agreement-ppa\/","title":{"rendered":"Qu\u2019est-ce qu\u2019un Power Purchase Agreement (PPA) ?"},"content":{"rendered":"\t\t
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What is a Power Purchase Agreement (PPA)?<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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In a context where energy transition is becoming a strategic imperative for businesses, the Power Purchase Agreement (PPA)<\/a><\/strong> is emerging as a key tool for securing renewable electricity supplies while controlling long-term costs.
This electricity purchase agreement directly links a renewable energy producer and an end consumer (business, industrial, Government \/ public agencies), guaranteeing a fixed price and a carbon-free source of energy.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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This mechanism, already widely adopted in several European countries and the United States, is developing rapidly in France thanks to changes in the French regulatory framewor<\/a>k and the growing appetite of organizations for sustainable and competitive solutions.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Definition : Power Purchase Agreement<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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A Power Purchase Agreement (PPA) <\/strong>is a long-term contract whereby a buyer (often a company) commits to purchasing electricity produced from renewable sources from a producer. The duration of these contracts generally varies between 5 and 20 years.
The main objective is twofold: <\/p>\n

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    To secure the price of electricity <\/strong>over a long period of time, protecting against market fluctuations.<\/p>\n<\/li>\n

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    To reduce the carbon footprint<\/strong> of the business by consuming energy that is guaranteed to be 100% renewable.<\/p>\n<\/li>\n<\/ol>\n

    Origin of the concept<\/b>
    The PPA model emerged in the 1980s in the United States, initially to facilitate the financing of large power plants. With the rise of renewable energies, it has established itself globally as a benchmark solution for guaranteeing stable outlets for producers and security of supply for consumers. <\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    The different PPA models<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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    Type of PPA<\/th>\nCharacteristics <\/th>\nAdvantages <\/th>\nIdeal in the following situations<\/th>\n<\/tr>\n<\/thead>\n
    On-site PPA<\/strong><\/td>\n

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    		Electricity generated directly on site (rooftop photovoltaic<\/a>, parking Solar Carport) and energy produced consumed on site.<\/td>\n

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    		\u2013 Reduction in transmission losses
    \u2013 Visibility of production
    \u2013 Direct impact on the bill<\/td>\n

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    		Industrial, logistics, or service sector sites with available space<\/td>\n<\/tr>\n
    Off-site PPA<\/td>\n

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    		Production in an off-site renewable energy plant, delivery via the grid.<\/td>\n

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    		\u2013 Access to large volumes
    \u2013 Geographic flexibility
    \u2013 Pooling possible<\/td>\n

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    		Multi-site or high-consumption companies<\/td>\n<\/tr>\n
    Virtual or financial PPA<\/strong><\/td>\n

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    		Financial contract without physical delivery, stabilization of electricity prices.<\/td>\n

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    		\u2013 Budget security
    \u2013 Energy diversification
    \u2013 No location constraints<\/td>\n

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    		Companies seeking to secure prices or diversify their sources<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Power Purchase Agreements<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    A Power Purchase Agreement<\/strong> can take three main forms: On-site<\/strong>, Off-site<\/strong>, or Virtual<\/strong> (also known as a Financial PPA), each of which will get back to specific needs and constraints.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    On-site PPA<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    An On-site PPA<\/b> involves installing a renewable electricity generation unit directly on the company’s site, for example on the rooftop of a building or in the form of parking Solar Carports. The electricity produced is then consumed on site, without passing through the public grid. This model is particularly suitable for industrial, logistics, or service sector sites with large usable areas, as it reduces transmission losses, provides real-time visibility of production, and has a direct impact on energy bills. <\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    Off-site PPA<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Off-site PPA<\/b>, on the other hand, is based on electricity production in a renewable power plant located outside the consumer site. The energy is transmitted via the national electricity grid. This model allows for larger volumes than on-site and offers geographical flexibility. It is particularly popular with multi-site companies or those with very high electricity consumption, which can pool production with other buyers. <\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    Virtual power purchase agreement (or financial PPA)<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Finally, the virtual PPA<\/b>, also known as a financial PPA<\/b>, does not involve the physical delivery of electricity between the producer and the buyer. It is a purely financial contract in which both parties agree on a fixed price for a given period. Any differences between this price and the market price are compensated financially. This model is particularly useful for companies that want to stabilize their supply costs or diversify their energy sources without technical constraints related to the location of their facilities. <\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    How does a Power Purchase Agreement work?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    A Power Purchase Agreement (PPA)<\/strong> is a long-term bilateral contract <\/strong>between a renewable electricity producer <\/strong>and a buyer<\/strong>, often a company, industrial operator, or local authority. This contract sets out several key parameters upon signing: <\/p>\n