Power Purchase Agreement from Commercial and Legal Perspective

About the Course

A Power Purchase Agreement (PPA) is an agreement between a (green) electricity generator and a purchaser, such as an electricity consumer or trader. It contains all provisions of the agreement, such as the quantity of electricity to be supplied, the negotiated price, who is responsible for which risks, the required accounting, and the penalties for noncompliance. A PPA can be tailored to the parties' desires as a bilateral agreement, allowing the supply contract to take various forms. Through a PPA, electricity can be supplied directly or virtually. It is typically a long-term contract which (partially) eliminates the risk of electricity market fluctuations, which is advantageous for large, debt-financed undertakings. PPAs are also executed for the sustained operation of renewable energy facilities when subsidies are no longer provided.  

Depending on regulations and the energy market, PPAs may be an advantageous and stable energy supply method or purchase in various circumstances. Are you the developer or proprietor of a photovoltaic system or wind farm? Then, you require a purchaser for the generated electricity. Or are you a large consumer interested in being supplied with renewable energy at a competitive price? Then, you can agree with a renewable energy producer with or without an intermediary to handle processes such as program responsibility.

This 5-day interactive Power Purchase Agreement from Commercial and Legal Perspective training course will draw on various PPAs and elaborate on Financial, Commercial, Contractual, and Risk Management issues.

Core Objectives

The training course can empower delegates with the knowledge and skills needed to navigate the complexities of power purchase agreements effectively. It can vary depending on the specific needs and goals of the delegates.  

The delegates will achieve the following crucial objectives:

• Understand what PPAs are, their purpose, and how they work within the context of renewable energy projects and the energy industry
• Explain the legal and regulatory framework surrounding PPAs, including relevant laws, regulations, and compliance requirements at the local, national, and international levels
• Understand the types of Power Purchase Agreements used for implementing power projects
• Know the coverage of the commercial aspects of PPAs, including pricing mechanisms, payment structures, risk allocation, key contractual terms and negotiation strategies
• Address risk factors associated with PPAs, including market risks, operational risks, and force majeure events, and strategies for mitigating these risks
• Enhance the negotiation skills to effectively represent their organisations' interests when entering into PPA negotiations with counterparties
• Know how to negotiate an effective Power Purchase Agreement encompassing all the critical issues faced upon instances of delayed scheduled, cost overruns, substandard quality, pricing volatility, and many more real-life problem scenarios

Training Approach

This training course uses a variety of training inputs to appeal to all learning styles and types, including lectures, tutorials, case study analyses, role-play exercises, training, video inputs, facilitated discussion sessions, Q&A sessions, and some coursework. This mixture of inputs ensures speedy, facilitated learning and ample and quick opportunities to practice the new skills and embed them into your daily routines.

The Attendees

This training course is valuable for many professionals and stakeholders in the energy and renewable energy sectors.

Likewise, it will be valuable to the professionals but not limited to the following:

• CFO
• CRO
• Economists
• Senior Engineers
• Finance Director
• Energy Industry Professionals
• Project Managers
• Renewable Energy Developers
• Legal Counsel
• Financial Analysts
• Commercial Managers
• Government and Regulatory Authorities 
• Procurement Specialists
• Environmental and Sustainability Manager

Daily Discussion

DAY ONE: DAY ONE: POWER PURCHASE AGREEMENT – INTRODUCTION & MAIN FEATURES

• Introduction to the Energy Industry and the Power Purchase Agreement
• Power Generation Project Lifecycle
• What is a Power Purchase Agreement?
• When to use Power Purchase Agreements?
• What is the PPA Process?

DAY TWO: ESSENTIAL CLAUSES IN A POWER PURCHASE AGREEMENT

• Pricing Mechanism and Price Escalation
• Performance Guarantees
• Contracted Capacity and Energy
• Maintenance and Scheduled Outages
• Commissioning and Commercial Operations Commencement
• Force Majeure Provisions

DAY THREE: RISK MANAGEMENT AND ASSESSMENT IN A POWER PURCHASE AGREEMENT

• Dealing with Risk 
• Liquidated Damages: Delay and Performance
• Variation Orders and Cost Overruns
• Minimum and Maximum Delivery Obligations
• Change in Tax Law

DAY FOUR: COMMERCIAL ASPECTS OF POWER PURCHASE AGREEMENTS

• Price, Volume, and Tariffs
• Metering
• Take or Pay Obligations
• Credit & Tenor Risk
• Managing Lender Expectations

DAY FIVE: NEGOTIATION OF A POWER PURCHASE AGREEMENT AND DISPUTE RESOLUTIONS

• What should you negotiate in PPA?
• Negotiation Preparation for Drafting Effective Power Purchase Agreements
• Advanced Negotiation Preparation, Execution, and Closing Tactics
• BATNA Identification and Assessment for Financial Dispute Strategy Selection
• Alternative Dispute Resolution Strategies to Avoid Costly Litigations