Power Purchase Agreement

STANDARD DEFINITION · CACHED

In infrastructure and operations, a power purchase agreement (PPA) is a generally long-term contract between an electricity seller or generator and a buyer, which may be a utility, company, or other purchaser—not necessarily a large-scale consumer. PPAs are used across industries to improve electricity-price predictability and, depending on the energy source and contract terms, support sustainability goals; , , and are major corporate buyers. Corporate PPAs can support financing for new renewable energy projects, including wind and solar farms, a role that is not specific to AI demand. Training and running workloads are among several contributors to growing data-center electricity consumption. In September 2024, signed a 20-year PPA with Constellation Energy to support restarting Three Mile Island Unit 1 and match data-center electricity use with carbon-free nuclear generation. This is a grid-based electricity procurement arrangement, not a dedicated baseload connection to particular clusters or facilities; nuclear PPAs are not a distinct contract category specialized for AI computing.

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Power Purchase Agreement

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