Topic
PPAs can stabilize long-term energy costs and support decarbonization goals — but they also introduce new risks:
volume mismatch, profile exposure, and counterparty complexity.
This page focuses on decision structure and risk tradeoffs — not marketing claims.
Where PPAs fit (and where they don’t)
- PPAs are long-term structures: they can reduce long-term uncertainty, but increase commitment risk.
- They don’t remove volatility automatically: profile and balancing exposure can remain.
- They need governance: approvals, risk limits, and reporting must match the time horizon.
Core risk questions
Volume & profile
How well does generation match your consumption shape — and who carries the mismatch cost?
Credit & counterparty
Long duration increases counterparty and settlement risk. How is it mitigated and monitored?
Pricing structure
Is the contract fixed, indexed, capped, or hybrid — and how does it behave in extremes?
Claims & reporting
How carbon claims are documented, verified, and communicated without overstatement.
Practical next step
Before evaluating a PPA, define risk limits and your procurement model — it’s the frame everything fits into.