Hydrogen Power Purchase Agreement
A hydrogen PPA is a long-term contract in which an offtaker purchases green hydrogen or electricity generated from hydrogen-fueled turbines at predefined prices. Contracts specify delivery volumes, purity standards, carbon intensity requirements, and indexing to energy commodities or inflation.
Project developers use hydrogen PPAs to finance electrolyzers, storage caverns, and generation equipment, aligning with clean hydrogen incentives and export targets. Agreements may include temporal matching clauses that ensure hydrogen production occurs during renewable generation hours.
Offtakers include industrial consumers, refueling hubs, or utilities seeking firm zero-carbon capacity. Contracts integrate performance guarantees for electrolyzer availability, storage integrity, and pipeline quality.
Investors analyze hydrogen PPAs alongside regulatory credits and interconnection timelines to derisk capital-intensive projects.
Technical Details
- •Defines delivery schedule, purity, and carbon intensity thresholds
- •May bundle electricity sales from hydrogen-fueled generation
- •Includes price escalation, indexation, and take-or-pay clauses
- •Requires measurement and verification of renewable inputs
- •Aligned with clean hydrogen tax credits and certification schemes
Why It Matters
Hydrogen PPAs create bankable demand for large-scale electrolyzer and storage projects. Tera catalogs contract terms, counterparties, and blending strategies so developers can benchmark emerging deal structures.
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