markets
VPPA
Also known as: Virtual Power Purchase Agreement, Synthetic PPA
Financial contract where a buyer pays a fixed price for renewable energy without physical electricity delivery, settled against market prices.
A Virtual Power Purchase Agreement (VPPA) is a contract-for-difference between a renewable generator and an offtaker. The buyer pays a fixed price (the strike price); the generator sells output to the wholesale market; the difference is settled financially. No physical electricity flows between them. VPPAs are the dominant corporate procurement structure in the US and growing in EU, used by hyperscalers (Meta, Google, Amazon) buying renewable energy across multi-site portfolios.