A power purchase agreement (PPA) is a long-term contract under which a buyer, often a large consumer, buys a generator’s output (or a financial equivalent) at an agreed price for years. Shape risk is the risk that the profile of the delivered output differs in value from a baseload block of the same volume: in a pay-as-produced PPA it falls on the buyer, in a baseload PPA on the seller, who must buy in the hours it does not produce.
Quantitative Finance · Glossaire
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Aussi appelé : power purchase agreement · shape risk