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02-02-2023 (Live Online Training)
19-07-2023 (Live Online Training)

P23GR14SG Power Purchase Agreements
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Power Purchase Agreements

LIVE ONLINE TRAINING: 4-Part series | 4 hours per part
February 2023 Course: 2 Feb | 3 Feb | 9 Feb | 10 Feb | 11:00 – 15:00 (SGT)
July 2023 Course: 19 Jul | 20 Jul | 26 Jul |27 Jul | 12:00 – 16:00 (SGT)

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overview

Key Learning Objectives

  • Understand how the global energy market has and continues to evolve
  • Learn that Bankability is perhaps not as straight forward as it first appears
  • Know what some of the key generator issues are that must be considered
  • Become familiar with some of the key risk factors that underpin PPA’s
  • Grasp the technicalities of dealing with a default situation
  • Become aware of ‘Curtailment’ and what its ramifications are
  • Gain knowledge of the operation of assignment provisions
  • Grasp the key challenges involved with balancing an energy system
  • Understand the mechanics of LNG SPA’s
  • Become familiar with the concept of Force Majeure and understand why it is so very important to PPA’s
  • Acquire a working knowledge of dispute resolution mechanisms and the key elements of international commercial arbitration.

About the Course

The world is changing and the need for electricity continues to grow as power generation markets continue to evolve and demand continues (in many parts of the world) to outstrip available supply – although still a major source, the role of fossil fuels is beginning to diminish as focus starts to shift towards other alternative ‘cleaner’ forms of energy (renewables) such as wind; solar; tidal or hydro. As power generation infrastructure continues to grow through the investment of both governments and private organisations, the central enabling mechanism is the Power Purchase Agreement (PPA). This is the contract that enables entities such as utilities to contract with privately owned power generation projects and to purchase electricity from them (Offtakers). Constructing power generation facilities and supporting infrastructure is an expensive business – hence the PPA will provide a modicum of certainty to principle participants as to the execution of the EPC contract, the repayment of debt, the amount of resource provided and the longevity of supply.

This course has been specifically tailored to explore this complex contractual area and to immerse delegates within a problem solving, open discussion forum experience in order to maximise take away added value and to gain knowledge and insights that are immediately valuable and useful.

Who Will Benefit

  • Individuals seeking to understand the mechanics of a PPA
  • Commercial decision makers
  • Legal departments
  • Contracts personnel
  • Project personnel

pricing

Packages Price
Live Online Training 2023SGD $2495

Register 2 and third attends free Call us today on +65 6973 3562 or email sgtraining@informa.com to take advantage of the discount offer.

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Register today for our Live Online Training courses and fi nd out how they can help you transform the way you work. Contact one of our training consultants on sgtraining@informa.com to find out more.

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Testimonials

“The course was an eye opener and it gave me a broad view of how power projects are executed”
Energy Management Engineer, Meralco

“Trainer and programme help me understand basic mechanism of projects in power & energy sectors, the differences across markets as well as different attendees’ perspectives”
Project Manager, Juwi Shizen Energy

“Conducive group size, Good mix of participants, Trainer is very knowledgeable”
Business Development Manager, Keppel Fels Limited

trainer

Christopher Lennon

Agenda

THE EVOLUTION OF THE GLOBAL ENERGY MARKET

  • The traditional sources – fossil fuels and the greenhouse gas debate
  • Nuclear energy – a poisoned chalice?
    Case studies – Chernobyl, 3 Mile Island, Fukishima
  • US shale oil and gas – the global ramifications
  • LNG – it’s time still to come? Development of the LNG global market
  • Renewables – drive for carbon reductions – solar, hydro, wind and tidal power sources examined
  • Case study: A comparison between Solar 1 and the Crescent Dune facility
  • The rise of the ‘spot market’ and the ‘Merchant’ power plant

KEY PPA CONSIDERATIONS

  • ‘Bankability’ – an issue in flux
  • Choice of technology – what type of power generation to be utilized/contracted with?
  • Sources of financing
  • No standard PPA – wide range of contractual differences in price mechanism – i.e. fixed price, ‘range’ (floor/ceiling), floating index based, etc.
  • A ‘Contract for Difference’ (CFD) explained
  • Term – long/short – ramifications of each
  • Who is the offtaker – Wholesale/retail (utility vs. distributed (i.e. private))
  • Feed in tariff costs (FIT)
  • The ‘Effective Date’
  • Agreed volume of supply and capacity
  • ‘Synchronisation’ between lifespan of PPA and repayment of funding
  • Environmental considerations

KEY GENERATOR ISSUES

  • Size and output (capacity)
  • Proven or ‘unproven’ technology
    case study – considerations for investment
  • Metering capabilities at ‘point of delivery’ (POD)
  • Expiration and renewal terms
  • The question of ‘fair market value’

KEY RISK FACTORS

  • Volatile tariffs/low tariffs
  • Securing long term funding – The issue of ‘collateral’ (guarantee) (buyer to seller) – raising debt finance, the BOT model + variations (BOOT/BLT/DBOT)
  • The mechanics of nonrecourse debt/loan
  • Location/proximity issues (source; destination; infrastructure)
  • Feedstock – security of supply – storage/transportation issues
  • Difficulty in connecting to the grid (technical or commercial)

DEALING WITH DEFAULT IN PPA’S

  • Risk allocation from generator to POD
  • Transmission access and the cost of transmission upgrades
  • Breach and misrepresentation
  • ‘Cross default’ on site host lease agreement
  • Deviation penalties
  • ‘Notice and Cure’ provisions – attempting to avoid termination – EOT’s?
  • The ‘Termination Purchase Price’
  • Post termination obligations
  • ‘Step – in‘ rights
  • Mutual indemnification towards 3rd parties (damages resulting from misrepresentation or breach)
  • Consequential damages disclaimer – ‘capping’ of damages
  • Non-default events
  • Dealing with compensation provisions in the contract

CURTAILMENT (DISPATCH BELOW MAXIMUM OUTPUT)

  • Why does curtailment occur? – key reasons examined Renewables vs. traditional power generation
  • The relationship between curtailment; degree of transmission infrastructure and excess capacity (periods of low demand)
  • Ramping implications
  • Question of payment if risk of interruption of supply – the need for ‘partnering strategies’
  • Interruptions – emergencies; grid load balancing; transmission problems (or WIP-i.e. upgrading/repair/maintenance)
  • Take or pay risk – up to POD or after PO

ASSIGNMENT AND NOVATION

  • Assignment provisions – who may assign -conditions – assignee must have financial robustness and take on all (expressly drafted) PPA obligations (Offtaker perspective) from supplier perspective might be for raising finance; selling assets; or part of divestment strategy
  • Agreed methodology of assignment (i.e. in writing)
  • Creation of securities

BALANCING THE ENERGY SYSTEM

  • Grid capacity/system congestion
  • Frequency requirements
  • Demand response
  • Lack of supply/oversupply
  • Transmission constraints
  • Storage and infrastructure facilities/ capacities
  • Organizational decision making/ response

LNG SPA’S

  • Contractual adjustment mechanisms – the problem with the traditional ‘Take-or Pay’ perspective
  • Portfolio SPA’s – guaranteeing security of supply?
  • Key issues preventing standardization of LNG SPA’s
  • The ‘Destination Clause’ examined
  • Class discussion
  • Stabilization Clauses examined
  • Reopener Clauses examined
  • The 10 significant impacting factors on LNG project finance and FID
  • The ‘Confirmation Memorandum’ examined

FORCE MAJEURE

  • A comparison of how different legal systems treat FM
  • Some important doctrines – foreseeability; impossibility of performance; commercial impracticality; remoteness and causality
  • The duty to mitigate
  • FM by implication
  • The vital importance of ‘drafting’ a FM clause – setting the scope correctly
  • Intertradex v Lesieur
  • The Eiusdem Generis Rule
  • Some typical FM provisions

INTERNATIONAL COMMERCIAL ARBITRATION

  • The commercial arbitral process explained
  • The New York Convention – enforceability of arbitral awards
  • Appointment of an arbitrator/arbitral tribunal
  • Ad hoc vs. Institutional arbitrations
  • The ‘seat’ of the arbitration
  • The ‘Doctrine of Separability’
  • The multi-tiered ‘escalation’ arbitral clause
  • ‘Forum shopping’ explained
  • Interim awards – a good idea?
  • Grounds for challenging an arbitral award
  • Class exercise – examining an Arbitral Clause
  • Waiver of sovereign immunity

when & where

02 Feb 2023

Live Online Training

19 Jul 2023

Live Online Training

On-site & in-house training

Deliver this course how you want, where you want, when you want – and save up to 40%! 8+ employees seeking training on the same topic?

Talk to us about an on-site/in-house & customised solution.

contact

Still have a question?

Sushil Kunwar
Training Consultant
+65 6989 6614
sgtraining@informa.com

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