Direct Power Purchase Agreement

Direct Power Purchase Agreement Template for England and Wales

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Key Requirements PROMPT example:

"Need a Direct Power Purchase Agreement for our new 50MW solar farm in Yorkshire, with a 15-year term starting March 2025, including provisions for REGOs transfer and a baseload purchase commitment of 40MW."

Document background

Direct Power Purchase Agreements have become increasingly important as organizations seek to secure renewable energy supplies and meet sustainability targets. This contract type, governed by English and Welsh law, establishes the framework for direct electricity purchases between generators and corporate buyers, typically spanning 10-15 years. The Direct Power Purchase Agreement covers essential elements including pricing structures, delivery obligations, green certificates, and risk allocation, while ensuring compliance with UK electricity market regulations and renewable energy schemes.

Suggested Sections

1. Parties: Identification and details of the generator and buyer

2. Background: Context of the agreement and facility details

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase Obligations: Core obligations regarding electricity sale and purchase

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

6. Term and Termination: Duration and termination provisions

7. Metering and Reporting: Requirements for measuring and reporting electricity generation

Optional Sections

1. Green Certificates: Provisions for the transfer of Renewable Energy Guarantees of Origin (REGOs) and other green certificates when these form part of the transaction

2. Development Obligations: Construction and commissioning requirements for facilities not yet operational, including milestone dates and consequences of delays

3. Private Wire Arrangements: Technical and operational specifications for direct wire connections between generator and buyer, applicable for private wire PPAs

Suggested Schedules

1. Facility Description: Technical specifications of the generation facility including location, capacity, and technology type

2. Pricing Schedule: Detailed pricing mechanisms, calculations, and adjustment provisions

3. Testing Procedures: Commissioning and performance testing requirements and standards

4. Metering Specifications: Technical requirements for metering equipment and data collection

5. Form of Direct Agreement: Standard form agreement governing the relationship between the buyer, generator, and any project finance lenders

Authors

Alex Denne

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

alex.den.21@genieai.co

Relevant legal definitions

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Electricity Act 1989: Primary legislation establishing the licensing requirements and regulatory framework for electricity generation and supply in England and Wales

Energy Act 2013: Key legislation covering electricity market reforms and Contract for Difference provisions

Climate Change Act 2008: Establishes carbon reduction commitments and renewable energy obligations

Electricity Market Reform (EMR): Regulatory framework for reforming the electricity market to meet low carbon objectives

Renewables Obligation (RO): Main support mechanism for large-scale renewable electricity projects in the UK

Feed-in Tariffs (FiT) Scheme Regulations: Regulations governing the payment system for small-scale renewable electricity generation

OFGEM Guidelines: Regulatory requirements and guidelines set by the Office of Gas and Electricity Markets

Contract Law Act 1999: General contract law principles applicable to commercial agreements

Unfair Contract Terms Act 1977: Legislation regulating unfair terms in contracts and limiting the extent to which liability can be excluded

Sale of Goods Act 1979: Legislation governing contracts for the sale of goods, as applicable to power purchase agreements

Environmental Protection Act 1990: Framework for environmental protection and regulations affecting energy projects

Grid Code: Technical code setting out the operating procedures and principles governing the relationship between National Grid and all users of the transmission system

Distribution Code: Technical requirements for connection and use of the electricity distribution networks

Balancing and Settlement Code: Rules for electricity trading arrangements and ensuring balance between supply and demand

EU Retained Law: European Union laws retained in UK legislation post-Brexit affecting energy markets and trading

REGOs Regulations: Regulations governing Renewable Energy Guarantees of Origin certificates and their trading

UK GDPR: Data protection requirements applicable to energy contracts and customer information handling

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Authors

Alex Denne

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