Contract For Differences PPA Template for Australia

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Key Requirements PROMPT example:

Contract For Differences PPA

"I need a Contract for Differences PPA for a 100MW solar project in Queensland, where my company will be the generator selling to a large industrial offtaker, with commercial operations expected to commence in March 2025."

Document background
The Contract for Differences PPA is utilized in the Australian electricity market as a risk management tool for both electricity generators and consumers. It is particularly relevant for renewable energy projects seeking revenue certainty and large electricity consumers wanting to manage price volatility. The document establishes a financial settlement mechanism based on the difference between an agreed strike price and the spot market price in the National Electricity Market (NEM). This type of agreement has become increasingly important with the growth of renewable energy projects in Australia, offering project developers the bankable revenue streams needed for project finance while providing offtakers with price certainty. The agreement must comply with Australian financial services regulations, energy laws, and the National Electricity Rules, making it a complex instrument that requires careful structuring to meet both commercial objectives and regulatory requirements.
Suggested Sections

1. Parties: Identification of the contracting parties including the generator/seller and buyer

2. Background: Context of the agreement, including facility details and purpose of the CFD arrangement

3. Definitions and Interpretation: Defined terms, interpretation rules, and hierarchy of documents

4. Term and Conditions Precedent: Contract duration, start date, and any conditions that must be met before the agreement becomes effective

5. CFD Payment Calculations: Methodology for calculating difference payments, including reference price, strike price, and settlement mechanics

6. Billing and Settlement: Process and timing for invoicing, payments, and dispute resolution for settlements

7. Metering and Data: Requirements for metering, data collection, and reporting

8. Credit Support: Requirements for providing and maintaining credit support or security

9. Market Operations: Obligations regarding NEM participation, bidding, and dispatch

10. Force Majeure: Definition of force majeure events and consequences

11. Default and Termination: Events of default, cure periods, and termination rights

12. Dispute Resolution: Process for resolving disputes between parties

13. Confidentiality: Obligations regarding confidential information

14. Representations and Warranties: Standard and specific representations and warranties of each party

15. General Provisions: Boilerplate clauses including notices, governing law, and assignment

Optional Sections

1. Construction and Commissioning: Required if the generating facility is not yet built, covering construction milestones, testing, and completion requirements

2. Environmental Products: Include if the agreement covers renewable energy certificates or other environmental attributes

3. Forecast and Planning: Include if specific forecasting obligations are required beyond standard market requirements

4. Interface with Retail Arrangements: Required if the CFD needs to align with retail supply arrangements

5. Change in Law: Detailed provisions for handling regulatory changes if standard force majeure provisions are insufficient

6. Insurance: Specific insurance requirements beyond standard requirements

7. Performance Guarantees: Include if specific performance metrics are required beyond standard availability

8. Network Connection: Required if the agreement needs to address specific network connection obligations

Suggested Schedules

1. Facility Description: Technical details of the generating facility including location, capacity, and technology

2. Testing Procedures: Procedures for performance testing and commissioning

3. Pricing and Settlement: Detailed pricing mechanisms, calculations, and worked examples

4. Credit Support Requirements: Detailed requirements for credit support including forms and calculations

5. Operating Parameters: Technical parameters for facility operation including minimum performance requirements

6. Metering Specifications: Detailed metering requirements and specifications

7. Form of Direct Agreement: Standard form of direct agreement for financiers

8. Generation Forecasting Requirements: Detailed forecasting obligations and procedures

9. Form of Guarantee: Standard form of parent company guarantee or performance guarantee

10. Interface Procedures: Procedures for coordination between parties' operational teams

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Energy & Utilities

Renewable Energy

Financial Services

Infrastructure

Manufacturing (as potential offtakers)

Mining (as potential offtakers)

Power Generation

Energy Trading

Relevant Teams

Legal

Energy Trading

Risk Management

Treasury

Commercial

Operations

Regulatory Compliance

Finance

Sustainability

Business Development

Project Management

Relevant Roles

Energy Trading Manager

Commercial Manager

Legal Counsel

Risk Manager

CFO

Energy Markets Director

Sustainability Manager

Power Plant Manager

Corporate PPA Manager

Treasury Manager

Regulatory Compliance Officer

Business Development Manager

Project Finance Manager

Operations Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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