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Power Purchase Agreements

2 Part Course  |  Learn everything you need to know about PPAs from a legal and up-to-date practice perspective

A wind turbine in a foggy landscape with a city in the near distance

A one-day PPA course presented over two-half days in a virtual class from 9:30am to 1:50pm UK time

PPA Training - Part One

Introductory Overview

Because the primary purpose of the PPA is to stabilise the Revenue generated by the power plant for the benefit of the debt financiers, it is appropriate to start with an overview of the characteristics of limited recourse financing, of the enforcement of contractual rights, and of the features of power generation.

  • The key characteristics of project financing
    • The project entity, limited recourse, single cashflow
    • Identifying, quantifying and managing cashflow volatility
  • Law and Contracts
    • Elements that will be governed by local law
    • The impact of Basle and the standardisation of contracts
    • PPA interface with other contracts – e.g. EPC, Fuel supply
      • The clauses that need to be harmonised
    • The importance of liquidated damages
  • Power Generation
    • Base Load, Peaking, Non-Dispatchable
    • Utility markets, bundled vs unbundled
    • Merchant markets

Corporate PPAs

A rapidly developing presence, firstly in North America and more latterly in Europe are Corporate PPAs, that can take a number of different forms, and have some differences from the more traditional Utility PPAs.  The growth in corporate PPAs is has accelerated as a result of the recently-encountered uncertainty and volatility in electricity prices.

  • Utility PPAs
  • Direct Wire PPAs
  • Sleeved PPAs
  • Virtual PPAs
  • Proxy PPAs

Law and the Enforcement of Rights

The one thing that a PPA has in common with O&M, Construction, Interconnection, and Financing Agreements is that they are all contracts. There is no point in having a contract unless we have reasonable prospects of enforcing our rights under those agreements - and this may well become an issue where the counterparties are from different jurisdictions.

  • If the financing is limited recourse, why litigation of disputes is unacceptable
  • Alternative Dispute Resolution procedures:
    • expert mediation
    • arbitration
    • the 1958 Convention
  • Sovereign power vs. contractual rights and obligations
  • Cross-border enforcement

Key Risks Within PPAs

Before this power purchase agreements training goes through the PPA itself in detail, we give special detailed consideration to the various risks that may be encountered in power generation projects.

  • Dispatch
    • Take-or-Pay, capacity charge, energy charge
    • Take-and-Pay, priority dispatch, deemed dispatch
    • Intermittency, reserve capacity
    • Curtailment
  • Tariff
    • Feed-in tariffs, selling forward
    • Fixed price, fixed escalators, cap-and-collar model
  • Feedstock Risk
  • Transmission Interconnection Risk
  • Heat Rate
  • Foreign Exchange exposures
  • Regulatory Risk
  • Political Risk
  • Tax Change Risk
  • Change in Control
  • Force Majeure
  • Termination & Compensation
    • Maturity, force majeure, Seller default, buyer default
    • Termination for convenience
    • Put and call options
  • Construction Risk – delays, performance
  • Sponsor credibility
  • Environment & Social Compliance
  • Counterparty credit risk
    • Credit enhancement options
    • Escrow and Trust Accounts
    • Contingency reserve accounts
    • Deficiency guarantees

PPA Training - Part Two

The Power Purchase Agreement

This represents the central focus of Redcliffe's PPA training courses. We propose to deep dive into a renewable Power Purchase Agreement, discussing the requirements and the flexibilities of each clause. It will give careful consideration of the objectives and perspectives of both the generator (seller) and the distributor (purchaser).

  • A profile of the project – the parties;
  • extension rights and options;
  • Conditions subsequent;
  • Performance Guarantees;
  • SPV’s construction & development obligations;
  • Interconnection responsibilities;
  • Contracted capacity & energy;
  • Tariff adjustments;
  • Metering;
  • Commissioning and commercial operations commencement;
  • Representations & warranties;
  • Purchaser covenants:
  • Generator Covenants:
  • Insurances required;
  • Maintenance and scheduled outages;
  • Confidentiality;
  • Credit enhancements (if required);
  • Flexibility provisions;
  • Early Termination rights;
  • Offtaker Step-in Rights;
  • Change in Law;
  • Local content;
  • Severance clause;
  • Transfer of ownership rights, assignments, novations;
  • Events of Default:
    • Generator/Seller;
    • Offtaker/Purchaser
  • Force majeure provisions;
  • Grace periods;
  • Liability & Indemnification;
  • Disclaimers and Limitations of Liability;
  • Law and jurisdiction;
  • Dispute Resolution;
  • Direct Agreements.
Please Note – This course is not suitable to particpants to attend either Part 1 or Part 2 only.

This Power Purchase Agreement course is delivered by an expert with a unique blend of experience in Law, Corporate Banking, Investment Banking, Corporate Financial Management, General Management and Workout. He has gained a worldwide reputation for the quality and depth of his training courses which have been developed and presented over 20 years.
  • He trained as a lawyer at Cambridge and the Middle Temple and was called to the English bar.
  • 5 years with an American bank (Chase), the world’s largest financier of oil and gas projects, as a corporate relationship manager in New York and London. In the 5 years in this role, he was exposed to the development of the North Sea projects and petrochemicals.
  • 6 years of investment banking in Hong Kong and London (Wardley – the investment bank subsidiary of HSBC), primarily involved in mergers and acquisitions and corporate restructurings.
  • 6 years as CFO of a public group with a joint head office in the United States and Australia. In this role he was engaged in some 35 acquisitions, over 20 equity raisings and a large number of complex financings, many of them structured on a limited recourse basis.
  • He was also responsible for the ‘workout’ of a company in severe financial difficulties, being appointed as General Manager by KPMG.

For the past 20 years, this PPA course trainer has acted as an independent consultant and financial trainer. On the consulting side, he has been primarily involved in the financial modelling and structuring of power generation, LNG, mining, and petrochemical projects, as well as undertaking project vetting for several clients. On the training side, he conducts training courses in Financial Modelling, Loan Documentation, Project Finance and Corporate Finance, Corporate Valuation, M&A and PPA training.

Power Purchase Agreements Training enables participants to identify:
  • How the provisions of a PPA support and safeguard the revenue of the project.
  • How they are an important component of the risk allocation structure of the project.
  • How power purchase agreements differ from each other according to the technology involved.
  • How lenders will approach the analysis of debt serviceability and the provisions that they will expect to benefit from in the agreement.
  • How the structure of the project and the obligations to other counterparties will influence the risk allocations within the PPA.

The majority of power project finance now involves renewable energy - this Power Purchase Agreements course covers renewable projects and identifies the rapid changes that are seen in the PPA agreements as the technologies evolve and the commercial viability gap is extinguished. 

The first half-day of this Power Purchase Agreement course deals with its contract enforceability, and the interface with some of the other project contracts, to ensure consistency and protection for both Lenders and Sponsors. It also focuses on the revenue of the project, which entails mechanisms for managing the volume of dispatch and the identification of the price to be paid by the off-taker for both distribution and deemed distribution.

The second half-day of PPA training represents a deep dive into the Power Purchase Agreement itself. We will work through the provisions of a renewable PPA.

  • Working through the examples and understanding the approach to Power Purchase arrangements across different jurisdictions was great

Number of places:
Part 1

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£ 795.00

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Part 2

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£ 795.00

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