Third Party Power Purchase Agreements are increasingly used in the UK energy market to facilitate direct electricity procurement between generators and consumers while maintaining regulatory compliance. These agreements are particularly valuable for renewable energy projects, providing revenue certainty for generators and stable electricity costs for consumers. Under English and Welsh law, these agreements must involve a licensed supplier as an intermediary to comply with electricity supply regulations. The document covers essential aspects including pricing mechanisms, volume commitments, metering requirements, and risk allocation between parties.
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1. Parties: Identification of all contracting parties including generator, buyer, and any intermediaries
2. Background: Context of the agreement, facility details, and purpose of the PPA
3. Definitions: Defined terms used throughout the agreement
4. Sale and Purchase Obligations: Core obligations regarding electricity sale and purchase, including volume commitments
5. Price and Payment: Pricing mechanism, payment terms, invoicing, and disputes
6. Term and Termination: Duration of agreement and termination rights
7. Metering and Communications: Requirements for measuring and reporting electricity generation
8. Force Majeure: Events outside parties' control affecting performance
1. Green Certificates: Provisions for handling renewable energy certificates or guarantees of origin when dealing with renewable energy sources
2. Development Obligations: Construction and commissioning requirements for projects not yet operational
3. Credit Support: Security arrangements and credit requirements when credit risk management is needed
1. Facility Description: Technical specifications of the generation facility
2. Pricing Schedule: Detailed pricing mechanisms and calculations
3. Operating Parameters: Technical operating requirements and constraints
4. Form of Direct Agreement: Standard form for direct agreements with financiers
5. Metering Specifications: Technical requirements for metering equipment
6. Performance Requirements: Minimum performance standards and testing procedures
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