Energy Purchase Agreement Template for England and Wales

An Energy Purchase Agreement is a long-term contract where a business agrees to buy electricity directly from a power generator, usually at a fixed price. These agreements have become increasingly popular in the UK as organizations look to secure renewable energy supplies and manage their electricity costs with more certainty.

Under English law, these contracts typically run for 10-15 years and spell out crucial details like the price per unit, minimum purchase amounts, and delivery terms. They're particularly valuable for companies wanting to meet their sustainability targets, as they can specify that the power comes from solar, wind, or other green sources. The agreement also helps power generators secure financing for new renewable projects by guaranteeing a steady income stream.

Consider an Energy Purchase Agreement when your organization needs to secure a stable, long-term electricity supply at predictable prices. These agreements work particularly well for businesses with high energy consumption or ambitious sustainability goals, like manufacturing plants, data centers, or retail chains operating across multiple UK locations.

The timing is especially right when you're planning major facility expansions, facing volatile energy market prices, or working to meet corporate environmental targets. Many UK businesses use these agreements to lock in renewable energy supplies for 10+ years, helping them comply with carbon reduction requirements while protecting against future price increases. They're also valuable when seeking green business certifications or responding to stakeholder sustainability demands.

• Corporate Power Purchase Agreement: Standard format for large businesses buying power directly from generators, typically including detailed volume commitments and pricing structures
• PPA Agreement Solar: Specifically designed for solar power purchases, with clauses addressing intermittency and seasonal generation patterns
• Virtual Power Purchase Agreement: Financial agreement where no physical power is delivered, instead settling differences between agreed and market prices
• PPA Solar Lease: Combines power purchase terms with site lease provisions for on-site solar installations
• Power Purchase Contract: Simplified version for smaller-scale arrangements with standardised terms and conditions

• Energy Generators: Power producers who sell electricity, often renewable energy companies operating wind farms, solar installations, or biomass plants across the UK
• Corporate Buyers: Large businesses and industrial consumers seeking long-term energy security and green credentials, including manufacturers, tech companies, and retail chains
• Legal Teams: In-house counsel and specialist energy lawyers who draft and negotiate the Energy Purchase Agreement terms
• Financial Institutions: Banks and investors who rely on these agreements to finance new power generation projects
• Energy Consultants: Technical advisors who help structure deals and assess power generation forecasts
• Regulatory Bodies: Ofgem and other authorities who oversee compliance with UK energy market rules

• Energy Requirements: Calculate your organization's annual electricity consumption and peak demand patterns
• Generator Details: Confirm the power source, capacity, location, and expected output of the generating facility
• Price Structure: Determine fixed rates, indexing mechanisms, or floor/ceiling prices for the energy purchase
• Contract Duration: Define the agreement length and any extension options, typically 10-15 years
• Delivery Points: Identify the grid connection points where electricity will be measured and transferred
• Performance Metrics: Establish minimum supply requirements and compensation for shortfalls
• Green Certificates: Specify requirements for Renewable Energy Guarantees of Origin (REGOs) if applicable

• Party Details: Full legal names, registered addresses, and company registration numbers of both generator and buyer
• Supply Terms: Specified volume of electricity, delivery points, and measurement protocols
• Price Mechanisms: Fixed rates, indexation formulas, and payment terms including VAT treatment
• Performance Standards: Minimum supply obligations, availability guarantees, and quality requirements
• Force Majeure: Defined circumstances for supply interruption and consequent obligations
• Termination Rights: Conditions for early contract ending and associated penalties
• Dispute Resolution: Clear procedures for handling disagreements under English law
• Regulatory Compliance: References to relevant UK electricity market rules and green certificates

An Energy Purchase Agreement differs significantly from a Asset Purchase Agreement in several key ways, though both involve substantial long-term financial commitments. The main distinction lies in their fundamental purpose and ongoing nature.

• Transaction Structure: Energy Purchase Agreements involve continuous delivery of electricity over time, while Asset Purchase Agreements deal with a one-time transfer of physical assets
• Duration and Performance: Energy agreements typically run 10-15 years with ongoing obligations, whereas asset purchases complete upon transfer
• Payment Terms: Energy deals usually involve regular payments based on consumption, while asset purchases have a fixed purchase price
• Regulatory Framework: Energy agreements must comply with specific UK electricity market regulations and green energy requirements, which don't apply to standard asset transfers
• Risk Allocation: Energy agreements focus on supply reliability and price stability, while asset purchases emphasize ownership transfer and condition warranties