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Virtual Power Purchase Agreement

Virtual Power Purchase Agreement Template for Denmark

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Key Requirements PROMPT example:

Virtual Power Purchase Agreement

I need a Virtual Power Purchase Agreement under Danish law for a tech company purchasing 100MW of wind power from a new offshore wind project, with settlement through Nord Pool and delivery starting March 2025, including specific provisions for environmental attribute transfers and parent company guarantees.

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Document background
Virtual Power Purchase Agreements (VPPAs) have become increasingly important in the Danish renewable energy market as corporations seek to meet sustainability goals and manage electricity costs. This document type is specifically designed for use in transactions where a corporate buyer wishes to support renewable energy development without physically receiving electricity, instead using financial settlements based on market prices. The agreement must comply with Danish energy law, EU regulations, and Nord Pool market rules, while addressing specific requirements for renewable energy certificates and financial derivatives under Danish law. VPPAs are particularly relevant for companies with significant electricity consumption in Denmark or those seeking to demonstrate renewable energy commitments in the Nordic market. The document includes detailed provisions for price calculations, settlement mechanisms, regulatory compliance, and risk allocation, tailored to the Danish regulatory environment.
Suggested Sections

1. Parties: Identification of the contracting parties (typically the corporate buyer and the project owner/seller)

2. Background: Context of the agreement, including project overview and parties' objectives

3. Definitions: Definitions of technical, financial, and legal terms used throughout the agreement

4. Term and Conditions Precedent: Duration of the agreement and conditions that must be met before the agreement becomes effective

5. VPPA Structure and Settlement: Core mechanics of the virtual PPA, including strike price, reference price, and settlement calculations

6. Payment Terms: Payment obligations, timing, and mechanisms for settlement

7. Metering and Reporting: Requirements for measuring and reporting energy production

8. Environmental Attributes: Ownership and transfer of renewable energy certificates or other environmental benefits

9. Force Majeure: Events excusing performance and associated procedures

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

11. Representations and Warranties: Standard and specific warranties from both parties

12. Dispute Resolution: Procedures for resolving disputes under Danish law

13. Governing Law and Jurisdiction: Confirmation of Danish law application and jurisdiction

14. Miscellaneous: Standard boilerplate provisions including notices, amendments, and assignment

Optional Sections

1. Credit Support: Required when either party needs to provide security for its obligations

2. Change in Law: Included when parties want specific provisions for handling regulatory changes

3. Milestone Requirements: Used when the project is not yet operational to track development progress

4. Project Financing Cooperation: Included when the seller requires buyer cooperation for project financing

5. Market Changes: Added when parties want specific provisions for handling significant market structure changes

6. Curtailment: Required when addressing compensation for grid operator curtailment events

7. Corporate PPAs Specific Provisions: Added when the buyer has specific corporate renewable energy goals or reporting requirements

Suggested Schedules

1. Project Description: Technical specifications of the renewable energy facility

2. Pricing and Settlement Calculations: Detailed formulas and examples of settlement calculations

3. Production Guarantees: Specified minimum production levels and associated damages

4. Form of Guarantees: Templates for any required parent company or bank guarantees

5. Metering Specifications: Technical requirements for metering and monitoring

6. Notice Details: Contact information and notice requirements for both parties

7. Form of Direct Agreement: Template agreement for lender step-in rights if required

8. Operating Parameters: Technical and operational requirements for the facility

9. Insurance Requirements: Required insurance coverage and limits

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Actual Generation
Affiliate
Agreement
As-Generated Profile
Availability
Balancing Market
Bank Guarantee
Billing Period
Business Day
Change in Law
Commercial Operation Date
Contract Quantity
Contract Year
Credit Rating
Credit Support
Curtailment
Day-Ahead Market
Deemed Generation
Delivery Point
Effective Date
Energinet
Environmental Attributes
Event of Default
Facility
Fixed Price
Force Majeure Event
Generator
GO Certificates
Good Industry Practice
Governmental Authority
Grid
Grid Connection Agreement
Grid Operator
Guarantor
Initial Delivery Date
Insolvency Event
Interconnection Point
Interest Rate
Lender
Liquidated Damages
Market Operator
Market Price
Material Adverse Effect
Metering Device
Minimum Credit Rating
Nord Pool
Operating Parameters
Parent Company Guarantee
Party/Parties
Payment Date
Performance Security
Planned Maintenance
Project
Project Documents
Prudent Operating Practice
Reference Price
Renewable Energy Certificates
Settlement Amount
Settlement Period
Strike Price
System Emergency
Tax
Term
Termination Date
Transmission System
Unit Contingent
Variable Payment
Clauses
Interpretation
Definitions
Term and Duration
Conditions Precedent
Sale and Purchase
Delivery Obligations
Price and Payment
Settlement
Metering
Environmental Attributes
Force Majeure
Change in Law
Representations and Warranties
Covenants
Credit Support
Default
Termination
Liability and Indemnification
Insurance
Assignment
Confidentiality
Notices
Dispute Resolution
Governing Law
Anti-Corruption
Data Protection
Taxes
Market Disruption
Curtailment
Performance Security
Reporting Requirements
Regulatory Compliance
Calculation and Settlement
Grid Connection
Project Development
Maintenance
Market Participation
Step-In Rights
Suspension Rights
Relevant Industries

Renewable Energy

Manufacturing

Technology

Retail

Financial Services

Industrial

Data Centers

Healthcare

Consumer Goods

Telecommunications

Relevant Teams

Legal

Procurement

Sustainability

Finance

Risk Management

Corporate Strategy

Operations

Environmental Social Governance (ESG)

Treasury

Energy Trading

Compliance

Relevant Roles

Chief Sustainability Officer

Energy Procurement Manager

Legal Counsel

Chief Financial Officer

Risk Manager

Environmental Compliance Manager

Sustainability Director

Power Trading Manager

Corporate Strategy Director

Renewable Energy Developer

Project Finance Manager

Energy Markets Analyst

Procurement Director

Environmental Social Governance (ESG) Manager

Industries
Danish Electricity Supply Act (Elforsyningsloven): Primary legislation governing the electricity market in Denmark, including requirements for power purchase agreements and market participation
Danish Renewable Energy Act (VE-loven): Regulates renewable energy initiatives and support schemes in Denmark, relevant for renewable energy-based VPPAs
Danish Contracts Act (Aftaleloven): Provides the legal framework for contract formation and enforcement in Denmark, essential for VPPA validity
Danish Financial Business Act (Lov om finansiel virksomhed): Regulates financial instruments and derivatives, which may apply to VPPAs depending on their structure
EU REMIT Regulation: Regulation on wholesale energy market integrity and transparency, affecting energy trading and reporting requirements
MiFID II / MiFIR: EU financial regulations that may apply to VPPAs if classified as financial instruments
Danish Corporate Tax Act (Selskabsskatteloven): Governs taxation of corporate entities, relevant for tax treatment of VPPA payments and settlements
Danish Energy Agreement 2018: Policy framework setting targets for renewable energy and affecting market conditions for VPPAs
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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