MASTERCLASS

Power Purchase Agreements

Power Purchase Agreements have evolved rapidly in recent years, barely keeping pace with the accelerating changes in technology and in the power markets.

This course guides participants through the full range of PPA structures from the traditional Utility/IPP model to increasingly prevalent Corporate Renewable PPAs being deployed in the Energy Transition and provides participants with a detailed explanation of their application and use in today’s markets.

The course is reinforced throughout by practical examples from actual transaction documentation, including reference to the EFET (European Federation of Energy Traders) standard form of Corporate PPA.

On completion of the course, participants will be equipped with a clear understanding of:

  • different types of PPA and their usage in various markets today
  • how PPAs can mitigate risk and facilitate project financing
  • core legal provisions of PPAs and how they are applied in practice
  • the drafting and key negotiation points in PPAs
  • the development of new products (eg from insurance market) and how these operate alongside corporate PPAs

The course is delivered over one half day (3 ½ hour) webinar session by Calvin Walker, who shares his knowledge gained from over 25 years’ experience leading and advising on project finance transactions at two major international law firms.

Course Overview

Introduction

  • What is a PPA?
  • Difference between Utility Scale PPAs and Corporate PPAs
  • Merchant vs PPA structure
  • Differences between PPAs and other types of contracts eg. Tolling, CFDs

Approach to risks in traditional/Utility PPAs

  • How the PPA makes a project bankable: banking perspective
  • Availability
  • Take or Pay vs Take and Pay
  • Treatment of Force Majeure
  • Change in Law
  • Default and termination
  • Step-in (Direct Agreements)
  • Disputes

The Energy Transition and the Role of Renewable PPAs

  • Drivers for Corporate Renewable PPAs
  • Corporate PPAs: How do they work?
  • Onsite and offsite PPAs
  • Virtual and Synthetic PPAs

Treatment of Different Risks in Corporate PPAs

  • Development Risk
  • Performance Risk
  • Volume Risk
  • Shape or Profile Risk
  • Balancing Risk
  • Credit Risk
  • Tenor and Price Risk
  • Change in Law Risk
  • Force Majeure Risk
  • Standard termination clauses and structure of termination payments

Market Update

  • New deal structures