How Can a Miner Use Power Purchase Agreements (PPAs) to Hedge Energy Cost Volatility? ▴ Learn

How Can a Miner Use Power Purchase Agreements (PPAs) to Hedge Energy Cost Volatility?

A Power Purchase Agreement (PPA) is a long-term contract between the miner and an electricity generator to buy power at a fixed, predetermined price for a specified period. By locking in their electricity cost, the miner hedges against the volatility of energy prices.

This provides cost certainty, which is crucial for profitability projections, allowing the miner to focus on managing other risks like crypto price volatility and network difficulty changes.

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