Reference

PPA, energy & data centers glossary

All key definitions to understand Power Purchase Agreements, guarantees of origin, 24/7 CFE, European power markets and AI data-center energy.

PPA: Power Purchase Agreement — long-term (5–25 yrs) electricity contract directly between a producer and a buyer (corporate, data center, industrial).
Corporate PPA: PPA signed by a corporate offtaker (Microsoft, Google, Air Liquide) rather than a utility, to lock in a long-term green price.
Virtual PPA (vPPA): Financial swap with no physical flow. Buyer pays a fixed price and receives spot; no electricity delivery.
Sleeved PPA: PPA where a utility (sleever) intermediates to handle balancing, profiling and multi-site billing.
Pay-as-produced (PaP): Billing on actual hourly output of the renewable park. Lower price, profile risk on the buyer.
Baseload PPA: Constant 24/7 delivery (8,760 h/yr), backed by nuclear, hydro or renewable + batteries.
GO / GoO: Guarantee of Origin — European (EECS) certificate proving 1 MWh of renewable origin. Tradable independently from power.
G-GO (granular): Hourly time-stamped and geo-located GO, required for 24/7 CFE matching.
REC: Renewable Energy Certificate — US equivalent of European GOs.
24/7 CFE: Carbon-Free Energy matched hour by hour — every MWh consumed covered by a decarbonised MWh produced in the same hour and zone.
CFE score: Share of hours where consumption is matched by local carbon-free electricity. Google targets 100 % by 2030.
CfD: Contract for Difference — price hedge between renewable producer and State/buyer, based on a strike price.
Capture rate: Ratio of the average price captured by a tech (solar, wind) to the average spot price. Falls with cannibalisation.
Shape risk: Risk that production profile does not match consumption profile, forcing spot purchases at high prices.
Profile cost: Additional cost charged by the sleever to convert variable output into baseload delivery.
Imbalance cost: TSO penalty charged to the BRP for deviations between nominations and actual output/consumption.
BRP: Balancing Responsible Party — financially responsible for forecast vs actual deviations on a price zone.
EPEX SPOT: European day-ahead and intraday power exchange (FR, DE, BE, NL, AT, CH, GB).
Nord Pool: Nordic and Baltic power exchange (NO, SE, FI, DK, EE, LV, LT, PL).
Day-ahead: Spot market where power is traded 24h ahead, hourly price fixed each noon (12:00 CET for EPEX).
Negative prices: Negative spot prices during renewable oversupply events. >2,000 h/yr in DE in 2025.
Cannibalisation: Bearish effect of renewables on their own capture price during simultaneous high-output hours.
RE100: Initiative of 400+ companies committed to 100 % renewable electricity, with annual reporting.
Scope 2 market-based: GHG Protocol methodology accounting emissions per purchase contracts (PPA, GOs).
PUE: Power Usage Effectiveness — ratio of total DC energy to IT energy. Target <1.2 (hyperscale).
WUE: Water Usage Effectiveness — litres of water / IT kWh. Liquid cooling lowers to 0.1–0.3.
Hyperscale: Data center >40 MW, operated by AWS, Azure, GCP, Meta, Oracle. Typically 100–300 MW for AI campuses.
Tier III/IV: Uptime Institute standards. III = 99.982 % uptime (1.6 h/yr), IV = 99.995 % (26 min/yr).
FLAP-D: Frankfurt — London — Amsterdam — Paris — Dublin, the 5 historic European hubs (>9 GW combined).
EU AI Act: EU AI regulation (2024) requiring transparency and energy reporting for models >10²⁵ FLOPs.
EED Art. 11: Energy Efficiency Directive Art. 11 — mandatory PUE/WUE reporting for data centers >500 kW.
CBAM: Carbon Border Adjustment Mechanism — EU carbon border tax on cement, steel, aluminium, electricity, hydrogen (2026).