Analyzing Power Purchase Agreements (PPAs): From PURPA to Clean Energy Procurement by Alphabet, Meta, Amazon, and Microsoft

A power purchase agreement (PPA) is a long-term contract under which a buyer purchases electricity or the financial value of electricity from a specific generation project at a price locked in years in advance. PPAs come in two structures: physical PPAs and virtual PPAs (VPPAs). According to the EPA, buyers must hold renewable energy certificates (RECs) or guarantees of origin (GOs) to claim they use green power. This affects the market-based Scope 2 emissions figures in corporate greenhouse gas inventories.