PPA Structures: Virtual PPA

13 march, 2021

This is a financial contract (in the form of a CfD), where the project owner and the corporate agree to swap a fixed price (paid by the corporate to the project) with the spot price (received by the project and paid onto the corporate) in respect of a certain volume of output that is contracted under the PPA (PPA Output). The corporate also receives the LGCs produced in respect of the PPA Output and is faced with several options in how it can deal with these, each with advantages and challenges (discussed in detail at Structure 3). The corporate continues to procure all of its electricity from its existing retailer under its standard retail contract.

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