Physical Power Purchase Agreement for Hong Kong

Physical Power Purchase Agreement Template for Hong Kong

A comprehensive agreement governed by Hong Kong law that establishes the terms and conditions for the physical sale and purchase of electricity between a power generator and an offtaker. This document details the technical, operational, and commercial aspects of power supply, including delivery specifications, pricing mechanisms, performance standards, and risk allocation. It incorporates Hong Kong's specific regulatory requirements under the Electricity Ordinance and Scheme of Control Agreements, while addressing local environmental compliance and technical standards for power generation and distribution.

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What is a Physical Power Purchase Agreement?

The Physical Power Purchase Agreement (PPA) is a crucial document for establishing long-term electricity supply arrangements in Hong Kong's regulated power market. It is primarily used when organizations need to secure dedicated power supply, often in contexts involving significant power consumption or renewable energy projects. The agreement navigates Hong Kong's unique regulatory framework, including compliance with the Electricity Ordinance and Scheme of Control Agreements governing the territory's power sector. This document type is particularly relevant given Hong Kong's increasing focus on energy security, sustainability, and the integration of renewable energy sources into its power mix. The agreement covers all essential aspects of power supply, from technical specifications and delivery parameters to pricing mechanisms and risk allocation, while ensuring compliance with local regulatory requirements and industry standards.

What sections should be included in a Physical Power Purchase Agreement?

1. Parties: Identification of the power generator/seller and the buyer/offtaker

2. Background: Context of the agreement, including facility details and purpose

3. Definitions and Interpretation: Defined terms, interpretation rules, and language conventions

4. Sale and Purchase Obligations: Core obligations for power delivery and acceptance

5. Term and Termination: Duration, conditions precedent, and termination rights

6. Delivery Point and Title: Specification of power delivery location and transfer of ownership

7. Metering and Testing: Requirements for measuring delivered electricity and testing procedures

8. Payment Terms: Pricing, invoicing, payment mechanics, and disputes

9. Operating Procedures: Day-to-day operational requirements and protocols

10. Maintenance and Outages: Scheduled maintenance, forced outages, and coordination requirements

11. Performance Standards: Required technical and operational performance levels

12. Force Majeure: Definition and consequences of force majeure events

13. Representations and Warranties: Standard and specific warranties from each party

14. Liability and Indemnification: Risk allocation and liability limitations

15. Insurance: Required insurance coverage and terms

16. Dispute Resolution: Process for resolving disputes under Hong Kong law

17. Confidentiality: Protection of confidential information

18. Governing Law: Application of Hong Kong law and jurisdiction

19. General Provisions: Standard boilerplate clauses including notices, amendments, etc.

What sections are optional to include in a Physical Power Purchase Agreement?

1. Interconnection: Required when seller is responsible for grid interconnection arrangements

2. Renewable Energy Credits: Include when dealing with renewable energy sources and associated credits

3. Carbon Credits: Include when carbon credits or emissions trading is relevant

4. Construction and Development: Required for facilities not yet operational

5. Lender Rights: Include when project financing is involved

6. Change in Law: Detailed provisions when regulatory changes are a significant concern

7. Performance Security: Include when parties require security deposits or guarantees

8. Local Content Requirements: Include when specific local content obligations apply

What schedules should be included in a Physical Power Purchase Agreement?

1. Facility Description: Technical specifications of the power generation facility

2. Testing Procedures: Detailed procedures for facility testing and commissioning

3. Operating Parameters: Technical operating specifications and requirements

4. Pricing and Payment: Detailed pricing formulas and adjustment mechanisms

5. Metering Specifications: Technical requirements for metering equipment

6. Performance Standards: Detailed performance criteria and testing methods

7. Form of Performance Security: Template for any required performance bonds or guarantees

8. Operating Procedures: Detailed protocols for day-to-day operations

9. Insurance Requirements: Specific insurance types and coverage levels required

10. Interconnection Details: Technical specifications for grid interconnection

11. Contact Information: Key contacts and notification procedures

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

Jurisdiction

Hong Kong

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Energy & Utilities

Manufacturing

Real Estate & Construction

Data Centers

Industrial Processing

Mining

Renewable Energy

Infrastructure

Technology

Retail

Relevant Teams

Legal

Procurement

Operations

Finance

Risk Management

Sustainability

Compliance

Engineering

Commercial

Facilities Management

Project Management

Environmental

Relevant Roles

General Counsel

Energy Procurement Manager

Facilities Manager

Chief Financial Officer

Chief Operations Officer

Sustainability Director

Risk Manager

Commercial Director

Technical Director

Compliance Officer

Project Manager

Energy Trading Manager

Legal Counsel

Contract Manager

Chief Engineering Officer

Industries
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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