A green power purchase agreement (green PPA) is a long-term contract to buy electricity from renewable energy sources, typically from a specific wind or solar project. It is used by companies, site owners, and charging operators to secure renewable electricity supply, manage energy price risk, and support credible sustainability claims through defined energy attributes and reporting structures.
What Is a Green Power Purchase Agreement?
A green PPA is an agreement between an electricity buyer (often a corporate customer) and a renewable energy seller (generator or project owner).
– The buyer commits to purchasing a defined amount of renewable electricity over a fixed period
– The seller commits to delivering energy and associated renewable attributes under agreed commercial terms
– The contract typically specifies volume, price structure, delivery/settlement method, and certificate treatment
Why Green PPAs Matter for EV Charging
For EV charging networks and fleet depots, energy cost and carbon reporting are strategic.
– Enables long-term renewable sourcing for depot charging, destination charging, and public networks
– Supports lower and more predictable energy costs compared to exposure to volatile spot markets
– Improves tender competitiveness where renewable electricity sourcing is required
– Strengthens market-based emissions reporting and ESG commitments when structured correctly
– Creates a scalable approach for multi-site operators that cannot rely on on-site renewables alone
How Green PPAs Work
Green PPAs can be structured in multiple ways depending on the market and the buyer’s setup.
– The buyer agrees a contract term (often multi-year) and a pricing model (fixed, indexed, or hybrid)
– Renewable generation and associated attributes are allocated to the buyer based on contract rules
– Settlement may occur through a supplier/utility, a market mechanism, or direct contractual settlement
– Reporting and verification are supported through certificate handling, metering, and audit trails
Common Green PPA Types
Green PPAs are typically categorized by how electricity and financial settlement are handled.
– Physical PPA – renewable electricity is physically supplied to the buyer via the grid and supplier arrangements
– Virtual PPA (VPPA) – a financial contract for differences where electricity is sold into the market and the buyer settles the price difference while receiving renewable attributes
– Sleeved PPA – a utility or supplier “sleeves” the power to the buyer and manages delivery and billing
– On-site PPA – renewable generation is located at the buyer’s site (e.g., solar canopy or rooftop PV), often paired with behind-the-meter consumption
Green PPAs vs Green Tariffs
Green PPAs and green energy tariffs can both support renewable electricity claims, but they are not the same.
– A green tariff is a retail supply product where renewable attributes are usually matched through certificates at the supplier level
– A green PPA is typically a direct or structured procurement linked to specific renewable generation and long-term contractual terms
– PPAs usually provide stronger long-term price and sourcing structure, while tariffs are simpler and faster to implement
Key Elements to Define Clearly
Green PPA credibility depends on governance and documentation.
– Renewable attribute treatment and certificate rules, including ownership and cancellation/redemption
– Matching approach (annual vs time-matched expectations, where relevant)
– Geographic boundary and whether location matching is required by stakeholders
– Metering, settlement methodology, and volume definition (MWh, baseload, as-produced)
– Reporting format for audits, ESG disclosures, and customer claims
– Contract risk allocation: curtailment, shape risk, imbalance costs, and force majeure
Benefits of Green PPAs
– Long-term renewable sourcing that supports credible sustainability positioning
– Improved energy price visibility and hedging against market volatility
– Potentially stronger “additionality” narrative compared to certificate-only approaches, depending on structure and project linkage
– Suitable for multi-site charging operators and fleets with large electricity demand
– Can be combined with DER, such as PV and BESS, for a deeper decarbonization and peak-management strategy
Limitations to Consider
– Contract complexity and negotiation effort compared to standard supply tariffs
– Volume and profile mismatch risk between renewable generation and charging demand
– Stakeholder expectations for attribute quality, location matching, and time matching may vary
– Grid constraints and site peak costs still require dynamic load management and power planning, even with renewable procurement
– Reporting claims must be clearly defined to avoid greenwashing risk
Related Glossary Terms
Green energy certificates
Guarantees of Origin (GO)
Green energy tariffs
Market-based emissions
Carbon intensity (gCO₂/kWh)
CO₂ savings reporting
Distributed energy resources (DER)
Energy management system (EMS)
Dynamic load management