The Physical Power Purchase Agreement is essential for businesses engaging in direct electricity supply arrangements in the Netherlands. It is commonly used when a power generator wishes to sell electricity directly to an end-user or trader, with physical delivery through the Dutch grid infrastructure. The agreement details all aspects of the power supply relationship, including technical specifications, delivery obligations, pricing mechanisms, and risk allocation. This document type has gained increased importance with the growth of renewable energy projects and corporate sustainability initiatives in the Netherlands. It must comply with Dutch energy regulations, including the Electricity Act 1998 and Grid Code, while also considering EU energy market rules. The agreement is particularly relevant for long-term power supply arrangements and typically includes provisions for grid connection, metering, balancing responsibility, and operational procedures specific to the Dutch electricity market.
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1. Parties: Identification of the power producer/seller and the buyer/offtaker, including registration details
2. Background: Context of the agreement, including facility details and parties' objectives
3. Definitions: Defined terms used throughout the agreement, including technical and market-specific terminology
4. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of electricity, including delivery point and exclusivity provisions
5. Facility and Production Requirements: Specifications of the generation facility and production commitments
6. Delivery and Metering: Requirements for physical delivery, metering arrangements, and grid connection
7. Price and Payment: Pricing mechanism, payment terms, invoicing, and dispute procedures
8. Grid Connection and Balancing: Responsibilities for grid connection, maintenance, and balancing requirements
9. Force Majeure: Events constituting force majeure and consequences
10. Term and Termination: Duration of agreement, renewal options, and termination rights
11. Representations and Warranties: Standard and specific warranties from both parties
12. Liability and Indemnification: Allocation of risks and liability limitations
13. Confidentiality: Protection of confidential information
14. Governing Law and Disputes: Choice of Dutch law and dispute resolution mechanisms
15. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment
1. Sustainability Requirements: For green PPAs: specifications regarding renewable energy certificates and sustainability reporting
2. Development and Construction: For new facilities: obligations regarding facility construction and development milestones
3. Storage Provisions: If applicable: terms relating to energy storage facilities and operations
4. Curtailment: If relevant: procedures and compensation for curtailment events
5. Market Changes: For long-term PPAs: mechanism to address regulatory or market structure changes
6. Credit Support: If required: parent company guarantees, bank guarantees, or other security arrangements
7. Insurance: If specific insurance requirements are needed beyond standard coverage
1. Facility Description: Technical specifications of the generation facility
2. Pricing Mechanism: Detailed pricing calculations, adjustments, and examples
3. Operating Procedures: Detailed procedures for day-to-day operations and communications
4. Metering Specifications: Technical requirements for metering equipment and procedures
5. Performance Specifications: Minimum performance requirements and testing procedures
6. Form of Direct Agreement: Standard form for lender direct agreement if project financed
7. Grid Connection Details: Technical specifications for grid connection
8. Form of Guarantees: Templates for any required parent company or bank guarantees
9. Commissioning Tests: If new facility: required tests and acceptance criteria
10. Contact Details: List of key contacts and authorized representatives
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