The lawfirm Norton Rose Fulbright published an excellent paper discussing the risks and negotiation points involved with corporate PPAs, most specifically virtual PPAs.

It starts with understanding what a virtual PPA is and why it’s important. “Eighty-two percent of power purchase agreements signed with US corporate offtakers in 2019 were “virtual” PPAs that do not involve physical delivery of electricity.”

It goes on to discuss basis risk or “the risk that the project owner takes by using the electricity prices at a “hub” for settling a VPPA while selling electricity from the project into the spot market at “node” prices.” And then the authors do a great job of breaking down the sensitivities from the perspective of both the buyer and the developer.