Physical Power Purchase Agreement Template for England and Wales

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Key Requirements PROMPT example:

Physical Power Purchase Agreement

"Need a Physical Power Purchase Agreement for a 50MW solar farm in Yorkshire, selling power to a large industrial consumer, with operations expected to commence in March 2025 and including provisions for REGOs transfer."

Document background
Physical Power Purchase Agreements are essential instruments in the UK energy market, providing the contractual framework for electricity trading between generators and purchasers. These agreements, governed by English and Welsh law, are particularly crucial for project finance and long-term energy procurement strategies. A Physical PPA typically includes detailed provisions for electricity delivery, pricing mechanisms, operational requirements, and risk allocation, ensuring compliance with UK regulatory requirements and grid codes. The agreement is fundamental for both renewable and conventional power projects, offering revenue certainty for generators and supply security for purchasers.
Suggested Sections

1. Parties: Identification of buyer and seller, including registered addresses and company details

2. Background: Context of the agreement, facility details, and purpose of the PPA

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase Obligations: Core obligations regarding electricity delivery and offtake

5. Pricing and Payment: Price structure, payment terms, invoicing, and dispute mechanisms

6. Term and Termination: Duration of agreement and termination rights

7. Metering and Communications: Requirements for measuring delivered electricity

8. Operating Conditions: Technical requirements and operational procedures

Optional Sections

1. Green Certificates: Provisions for handling REGOs and other environmental attributes - used for renewable energy facilities

2. Capacity Market: Provisions relating to capacity market participation - used when facility participates in capacity market

3. Development Obligations: Construction and commissioning requirements - used for facilities not yet operational

4. Change in Law: Mechanisms for dealing with regulatory changes - recommended for longer-term PPAs

Suggested Schedules

1. Facility Description: Technical specifications of the generation facility

2. Testing Procedures: Commissioning and performance testing requirements

3. Operating Parameters: Detailed technical and operational requirements

4. Pricing Mechanism: Detailed price calculations and adjustments

5. Metering Specifications: Technical requirements for metering equipment

6. Form of Direct Agreement: Standard form for lender direct agreements

7. Communication Protocols: Procedures for operational communications

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
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Electricity Act 1989: Primary legislation governing electricity generation, transmission, and supply. Covers licensing requirements, generation and supply regulations, and grid connection requirements.

Energy Act 2013: Key legislation covering electricity market reforms, capacity market regulations, and Contracts for Difference (CfD) framework.

Utilities Act 2000: Legislation governing market competition rules and consumer protection provisions in the utilities sector.

Grid Code: Technical and operational requirements for power generation, including connection conditions and balancing mechanisms.

Balancing and Settlement Code (BSC): Industry code defining electricity trading arrangements, metering requirements, and settlement processes.

Climate Change Act 2008: Framework for carbon reduction obligations and environmental reporting requirements.

Renewable Energy Regulations: Regulations covering Renewable Energy Guarantees of Origin (REGO) and Renewable Obligation Certificates.

OFGEM Guidelines: Regulatory guidelines covering license conditions, market participation rules, and price controls.

Competition Act 1998: Primary legislation governing competition law and anti-competitive practices in the UK.

Enterprise Act 2002: Legislation governing market regulation and competition law enforcement.

English Common Law - Contract Principles: Fundamental principles of contract law including formation, performance, termination, and force majeure.

Sale of Goods Act 1979: Legislation governing the sale of goods, applicable to electricity trading as electricity is legally treated as 'goods'.

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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