Power purchase agreement
A long-term contract that locks in where a data center's electricity comes from and what it will cost.
Ranks high (66/100) — set apart by current tension (74) and rising momentum (82).
Why it matters
The PPA is where power scarcity is priced and allocated; it decides who actually gets firm electricity and at what cost, feeding straight into unit economics and siting.
Why now
Hyperscalers are signing unprecedented long-term nuclear and clean-firm PPAs — restarting shuttered reactors and pre-buying SMR output — because firm supply, not price, is now the scarce thing.
If Power purchase agreement runs short
Contracted generation slips or a counterparty fails to deliver, leaving a financed campus holding a signed price but no electrons.
In depth · editorial + model
A multi-year offtake agreement between an operator and a generator that fixes the price, volume and clean-energy attributes of power supply. The PPA is where power scarcity is priced and allocated; it decides who actually gets firm electricity and at what cost, feeding straight into unit economics and siting. Hyperscalers are signing unprecedented long-term nuclear and clean-firm PPAs — restarting shuttered reactors and pre-buying SMR output — because firm supply, not price, is now the scarce thing. Contracted generation slips or a counterparty fails to deliver, leaving a financed campus holding a signed price but no electrons.
The companies exposed to Power purchase agreement
Constellation EnergyCEGSupplier90
NextEra EnergyNEESupplier70
Iberdrola, S.A.IBE.MCSupplier70
ENGIE SAENGI.PASupplier70
BrookfieldBAMSupplier70IPIntersect PowerSupplier65TVTennessee Valley AuthoritySupplier55
Southern CompanySOSupplier50
Duke EnergyDUKSupplier50
Entergy CorporationETRSupplier508002.TMarubeni Corporation8002.TProducer45
Public Service Enterprise Group IncorporatedPEGSupplier30+ 1 more companies
How to think about it
- Contracts allocate scarce supply before it exists
- Price certainty is bought with tenor
- Firm beats cheap when supply is the constraint
What to watch
- New nuclear/SMR offtake deals
- PPA tenor and price disclosures
- Clean-firm vs unbundled-REC structures
- Utility special large-load tariffs
Frequently asked
What is Power purchase agreement?
A long-term contract that locks in where a data center's electricity comes from and what it will cost.
Why does Power purchase agreement matter for AI?
The PPA is where power scarcity is priced and allocated; it decides who actually gets firm electricity and at what cost, feeding straight into unit economics and siting.
Who makes Power purchase agreement?
The companies the model tags as producers or suppliers of Power purchase agreement: Constellation Energy, NextEra Energy, Iberdrola, S.A., ENGIE SA, Brookfield, Intersect Power.
Which companies are most exposed to Power purchase agreement?
Constellation Energy, NextEra Energy, Iberdrola, S.A., ENGIE SA, Brookfield, Intersect Power — 13 companies in total are mapped to Power purchase agreement.
What happens if Power purchase agreement runs short?
Contracted generation slips or a counterparty fails to deliver, leaving a financed campus holding a signed price but no electrons.
Where does Power purchase agreement sit in the AI value chain?
Power purchase agreement sits in the Energy layer of the AI value chain.
Go deeper on Power purchase agreement
- The materials, geographies and policies it depends on — heat-mapped
- Substitutes, relief valves and the domino chains if it tightens
- The live tension score, momentum and news drivers
- Four levels of analysis — from plain-English to strategic
model v0.7.0 · research, not advice
Model scores are illustrative reads from our model of the AI value chain — not investment advice.