Virtual (financial) PPA
A PPA settled financially against a market reference price rather than through physical delivery — a private contract for difference between generator and buyer.
Under a virtual PPA, the parties agree a strike price against a market reference. When the reference price is below the strike, the buyer pays the generator the difference; when it is above, the generator pays the buyer. No power flows between them — each side continues to buy or sell electricity through its existing arrangements.
Virtual structures are commonly used by corporates contracting at scale or across many sites, since they avoid physical delivery logistics entirely. Renewable certificates are typically transferred alongside the financial contract to support the buyer’s renewable claims.
A virtual PPA is a private, bilateral contract for difference — distinct from the UK government’s CfD support scheme, which shares the mechanics but not the counterparty or purpose. Depending on its terms, a virtual PPA may be treated as a financial derivative for accounting purposes, which buyers should assess early.
Structuring against this in a live deal?
ETC prices and executes PPAs across GB — founder-led, from indicative quote to signed contract.