A Bundled VPPA is a contract where the renewable energy is physically delivered to the buyer's local grid, and the buyers receive both the renewable energy and the associated renewable energy credits(RECs).
The RECs represent the environmental attributes of renewable energy and can be used by the buyers to claim that they are using renewable energy.
Unbundled VPPA contracts as the name suggests, involve two transactions - one for the "unbundled" power and another for the associated Renewable Energy Credits(or RECs). An off-taker can take either, or both through the use of innovative models.
Unbundled contracts can be useful to offset carbon emissions where physical consumption of renewable energy is not possible, or for Scope II and III emissions abatement as part of an RE 100/SBTI or equivalent commitment.
