Introduction

Power purchase agreements (PPAs) are Performance-Based Contracts (PBCs), which stand as the linchpin of offshore wind project finance, playing a pivotal role in securing the substantial capital required for construction. As the global energy transition accelerates, offshore wind's contribution becomes increasingly significant, underscoring the necessity of bankable PPAs. These agreements, as a type of offtake agreement, provide crucial revenue certainty, mitigating the inherent risks associated with such large-scale projects. 

This article undertakes a critical analysis of PPA structures in the offshore wind context, examining the characteristics of a bankable PPA and the challenges involved with their long-term viability in a dynamic market. The article’s analysis primarily draws from US, UK, and Vietnamese approaches to offshore wind PPAs and Contracts for Difference (CfDs), with some references to the EU.