Pay-as-produced (PaP) PPA
A PPA structure in which the buyer takes the generator’s output as it is produced, at an agreed price per MWh, carrying the asset’s shape and volume risk.
Under a pay-as-produced structure, delivery simply follows the asset: whatever the wind farm or solar park generates in each settlement period, the buyer takes at the contracted price. There is no obligation on the seller to firm the profile up.
Because the buyer carries the shape and volume risk of an intermittent profile — including the tendency of renewable output to be concentrated in lower-priced hours — pay-as-produced typically prices at a discount to baseload for the same asset and tenor.
PaP is the most common starting point for renewable PPAs, and the reference against which shaped and baseload premia are usually quoted.
Related terms
Structuring against this in a live deal?
ETC prices and executes PPAs across GB — founder-led, from indicative quote to signed contract.