Types Of Power Purchase Agreements
A power purchase agreement (FTAA) is a long-term contract between a renewable energy project and a pantograph in which the buyer agrees to source energy from the project at a fixed price during the term of the contract. The old PDOs for renewables had a term of 20 years, but the maturities fell to 15, 12 and even 10 years to meet buyer demand. A ECA is a long-term agreement on the purchase of clean energy from a given asset at a predetermined price between a renewable developer and a consumer – usually a company that needs large amounts of electricity – or between a developer and a supplier who then resells the energy. The signing of a ECA can be considered as the sale of a project and its environmental characteristics (guarantees of origin): it is an obligation that allows a renewable energy developer to make an investment decision based on the criteria of profitability in relation to risk and / or to obtain the necessary financing for the realization of the project. The above-mentioned ECA should be distinguished from contracts for the receipt of electricity in a deregulated electricity market, which are generally power purchase agreements with a private producer whose plant is already in existence or where the plant is built at the initiative of the private producer. For examples of this type of ECA, click on the following links: Edison Electric Institute Master Power Purchase & Sale Agreement (PDF) (4/25/2000) and Tri-State AA. Power Purchase Agreements (PPAs) are used for energy projects in which: The buyer generally requires the seller to guarantee that the project meets certain performance standards. Performance guarantees allow the buyer to plan accordingly when developing new facilities or attempting to meet demand plans, which also encourages the seller to keep appropriate records. When the supplier`s service does not meet the contractual energy needs of the buyer, the seller is responsible for reducing these costs. Other warranties may be contractually agreed, including availability guarantees and performance curve guarantees.
These two types of guarantees apply rather in regions where the energy used by renewable technologies is more volatile.  There are different types of ECA depending on where the energy is produced: Long Term Draft Power Purchase Agreement (APP) of the Indian Central Electrical Regulatory Commission (CERC) (for projects where the location and fuel are indicated) (pdf) – draft power purchase agreement developed by CERC for the Indian PIP market – for long-term agreements (more than 7 years) for the construction of power plants, in the event that the location or fuel is not indicated. . . . .