Physical Power Purchase Agreement Template for New Zealand

The Physical Power Purchase Agreement (PPA) is a fundamental instrument in New Zealand's electricity market, used to establish long-term electricity supply arrangements between generators and purchasers. This document is essential when parties seek to create a direct supply relationship with physical delivery of electricity, as opposed to financial hedging arrangements. It's particularly relevant for renewable energy projects, industrial consumers, and utility companies operating within New Zealand's regulatory framework. The agreement must comply with the Electricity Industry Act 2010 and related regulations, while addressing commercial, technical, and operational aspects of power supply. It's commonly used for new generation projects seeking project finance, large industrial users wanting to secure long-term power supply, or generators looking to secure stable revenue streams through long-term contracts.

1. Parties: Identification of the power generator/seller and the purchaser, including full legal names and addresses

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

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules of interpretation

4. Term and Conditions Precedent: Duration of the agreement, commencement date, and any conditions that must be satisfied before the agreement becomes effective

5. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of electricity, including quantity commitments and exclusivity provisions

6. Delivery Point and Title: Specification of where electricity will be delivered and when title passes

7. Metering and Testing: Requirements for measuring electricity delivery and quality testing procedures

8. Price and Payment: Pricing structure, payment terms, invoicing, and dispute procedures

9. Operation and Maintenance: Requirements for operating and maintaining the generation facility

10. Curtailment and System Security: Provisions for reducing or interrupting supply and maintaining system security

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

12. Default and Termination: Events of default, remedies, and termination procedures

13. Liability and Indemnities: Allocation of risks and responsibilities between parties

14. Dispute Resolution: Procedures for resolving disputes between parties

15. General Provisions: Standard contractual provisions including notices, amendments, and governing law