Power Purchase Agreement from Commercial and Legal Perspective

Introduction

The Power Purchase Agreement (PPA) is complex component of an energy project and can be used to purchase any type of energy including both renewal and non-renewable.  Negotiating a bankable Power Purchase Agreement is essential if a project is to take off. 

A PPA must take into account present regulatory environment must also include provisions that will lock in price and quantity and manage risk factors as the agreement is normally for a 20-30 year period. Participant in this course will be given a road map of how to navigate through a PPA and have an in-depth knowledge of the essential clauses. 

This Power Purchase Agreement from Commercial and Legal Perspective training course will draw on a wide range of Power Purchase Agreements and case studies to elaborate on contractual, commercial and risk management issues that will invariably need to be addressed in a PPA. The success of an energy project will depend largely on how well a PPA is negotiated and executed. This training course aims to give participants the tools to achieve this.

The participants will experience an interactive training course involving discussion of several case studies from around the world, reading of model Power Purchase Agreements and participating in a mock negotiation of a PPA.

This GLOMACS training course will highlight:

• The different project structures and models for a PPA
• The roles and responsibilities of the seller and buyer under a PPA
• The essential contractual clauses necessary
• Risk management strategies
• Guarantees and warranties
• Pricing, tariffs and take or pay obligations
• Contract compliance and penalties
• Avoiding common errors and mistakes in negotiating a PPA agreement
• Adopting risk management strategies and the allocation and limitation of liability between seller and buyers of energy

Objectives

At the end of this GLOMACS training course, you will learn to

• Analyze the structure of the Power Purchase Agreement document and the terms of a power purchase agreement
• Understand the commercial and legal issues relating to the negotiation and execution of a PPA
• Know the different types of Power Purchase Agreements used for implementing power projects
• Apply effective strategies negotiation, execution and implementation of a PPA
• Understand the various considerations in adopting risk management measures and the allocation and limitation of liability between Sellers and Buyers of energy
• 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 Methodology

Participants to this training course will receive a thorough training on the subjects covered by the course outline with the trainer using a variety of proven adult learning teaching and facilitation techniques. Training course methodology includes both a lecture format and a handbook, case studies and practical problem solving sessions and interactive discussions.

Participants will receive materials that  provides the participants with a useful reference resource. The instructor also encourages questions and discussions  from participants during the topical presentations.

Organisational Impact

The organisation will benefit by:

• Expanding the expertise of personnel involved in PPA negotiations and execution
• Will allow project and general management teams to be more effective in dealing with commercial and legal aspects of a Power Purchase Agreement
• Learning how to allocate and manage risk and reduce the possibility of disputes and claims
• Reducing project failure, costly changes, and cost overruns caused by poor understanding and management of risk in a PPA
• Implementing better risk management which will improve the chance of project success
• Developing an appreciation of the true effect of contractual indemnities and limitation of liability which will minimize exposure of the company to project risks

Personal Impact

By the attending this training course, participants will be able to: 

• Understand the essential elements of a Power Purchase Agreement
• Familiar with best contracting strategies  for a PPA
• Assess operational, commercial, legal and financial risks in energy projects
• Appreciate the essential elements of the implementation and execution of a Power Purchase Agreement
• Negotiate an effective PPA
• Effectively manage and resolve claims and disputes