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Commercial Power Purchase Agreement

Commercial Power Purchase Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Commercial Power Purchase Agreement

"I need a Commercial Power Purchase Agreement for a 50MW solar power facility in Riyadh, Saudi Arabia, with planned commercial operation date of March 2025, including specific provisions for renewable energy credits and grid connection requirements."

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Document background
The Commercial Power Purchase Agreement (PPA) is a crucial document in Saudi Arabia's energy sector, used to formalize long-term electricity supply arrangements between power generators and commercial/industrial consumers. It is essential for projects ranging from conventional power plants to renewable energy facilities, reflecting Saudi Arabia's evolving energy landscape and Vision 2030 objectives. The agreement must comply with ECRA regulations, Saudi electricity laws, and Sharia principles while addressing commercial aspects such as pricing mechanisms, delivery obligations, and performance standards. Typically used for arrangements lasting 5-25 years, this document includes detailed technical specifications, risk allocation provisions, and specific requirements for power delivery, making it fundamental for energy infrastructure development and industrial operations in Saudi Arabia.
Suggested Sections

1. Parties: Identification of the power seller (generator) and buyer, including their legal status and authority to contract

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

3. Definitions: Comprehensive definitions of technical and legal terms used throughout the agreement

4. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of electricity, including minimum take-or-pay provisions

5. Term and Termination: Duration of the agreement, conditions for renewal, and termination rights

6. Delivery Point and Title: Specification of the point where electricity is delivered and title transfers

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

8. Price and Payment: Pricing structure, payment terms, and invoicing procedures

9. Operation and Maintenance: Obligations regarding facility operation and maintenance standards

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

11. Default and Remedies: Events of default and corresponding remedies

12. Dispute Resolution: Procedures for resolving disputes, including arbitration provisions compliant with Saudi law

13. Governing Law: Specification of Saudi law as governing law and incorporation of Sharia principles

14. Notices: Procedures for formal communications between parties

15. Confidentiality: Obligations regarding confidential information

16. Assignment: Restrictions and conditions for transferring rights under the agreement

Optional Sections

1. Change in Law: Provisions addressing regulatory changes - include for long-term PPAs

2. Renewable Energy Credits: Provisions regarding ownership and trading of renewable energy credits - include for renewable energy projects

3. Grid Connection: Detailed provisions regarding grid interconnection - include if seller responsible for connection

4. Development and Construction: Provisions regarding facility construction - include for new facilities

5. Environmental Attributes: Allocation of environmental benefits and credits - include for green energy projects

6. Security Arrangements: Requirements for performance bonds or guarantees - include based on project risk assessment

7. Insurance: Specific insurance requirements - include based on risk profile

8. Local Content: Requirements for local content and Saudi participation - include if required by regulations

Suggested Schedules

1. Facility Description: Technical specifications of the generation facility

2. Testing Procedures: Detailed procedures for capacity and performance testing

3. Metering Specifications: Technical requirements for metering equipment and procedures

4. Pricing Formula: Detailed pricing calculations and adjustments

5. Operating Parameters: Technical operating specifications and requirements

6. Form of Generator Performance Security: Template for required performance security documents

7. Interconnection Requirements: Technical specifications for grid connection

8. Annual Supply Quantity: Specified quantities of electricity to be supplied

9. Key Performance Indicators: Performance metrics and standards

10. Form of Direct Agreement: Template for direct agreements with lenders if required

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
Agreement
Applicable Law
Available Capacity
Billing Period
Business Day
Capacity
Commercial Operation Date
Competent Authority
Connection Point
Contract Capacity
Contract Year
Deemed Generated Energy
Delivery Point
Dispatch Instructions
ECRA
Effective Date
Electricity Law
Emergency
Energy Charge
Environmental Attributes
Event of Default
Expiry Date
Facility
Force Majeure Event
Good Industry Practice
Grid
Grid Code
Guaranteed Energy
Initial Term
Interconnection Facilities
Invoice
Islamic Finance Provisions
kW
kWh
Lenders
Maintenance Schedule
Metering Point
Metering System
Minimum Take-or-Pay Quantity
Monthly Payment
Net Electrical Output
Operating Parameters
Operating Period
Outage
Performance Security
Point of Common Coupling
Power Factor
Power Purchase Price
Prudent Utility Practice
Reactive Power
Regulatory Requirements
Relevant Authority
Required Commercial Operation Date
SCADA System
Scheduled Outage
SEC
Security Package
Seller's Facilities
Sharia Compliant
Site
Specified Rate
Step-in Rights
System Emergency
Taking Over Date
Tariff
Technical Limits
Term
Testing
Transmission System
Unit
Unscheduled Outage
Voltage
Clauses
Interpretation
Conditions Precedent
Term and Duration
Sale and Purchase Obligations
Delivery Point
Title and Risk
Metering
Testing and Commissioning
Operating Standards
Maintenance
Price and Payment
Invoicing
Security
Force Majeure
Change in Law
Default
Termination
Liability and Indemnification
Insurance
Assignment and Transfer
Confidentiality
Dispute Resolution
Governing Law
Notices
Performance Standards
Grid Connection
Environmental Compliance
Emergency Procedures
Records and Reporting
Representations and Warranties
Technical Requirements
Scheduled Outages
Take-or-Pay Obligations
Islamic Finance Compliance
Local Content Requirements
Step-in Rights
Intellectual Property
Health and Safety
Decommissioning
Anti-corruption
Taxes
Relevant Industries

Energy & Utilities

Manufacturing

Industrial Processing

Mining

Real Estate & Construction

Petrochemicals

Data Centers & Technology

Healthcare

Retail & Commercial

Hospitality

Infrastructure

Renewable Energy

Relevant Teams

Legal

Operations

Finance

Procurement

Risk Management

Compliance

Technical Operations

Commercial

Business Development

Sustainability

Facilities Management

Project Management

Regulatory Affairs

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Legal Director

Commercial Director

Energy Procurement Manager

Facilities Manager

Operations Director

Project Finance Manager

Risk Manager

Sustainability Director

Technical Director

Contracts Manager

Power Plant Manager

Regulatory Compliance Officer

Business Development Director

Energy Trading Manager

Industries
Electricity Law (Royal Decree No. M/56): Primary legislation governing the electricity sector in Saudi Arabia, including licensing requirements, generation, and distribution regulations
Electricity & Co-generation Regulatory Authority (ECRA) Regulations: Regulatory framework for power generation, distribution, and sales, including specific requirements for PPAs
Commercial Court Law (Royal Decree No. M/93): Governs commercial transactions and dispute resolution in Saudi Arabia
Law of Commercial Papers (Royal Decree No. M/37): Regulates commercial documentation and payment obligations
General Environmental Law (Royal Decree No. M/34): Environmental protection requirements affecting power generation facilities
Foreign Investment Law (Royal Decree No. M/1): Regulations regarding foreign investment in Saudi Arabia's energy sector
Saudi Vision 2030 Energy Policies: National development framework affecting energy sector investments and renewable energy requirements
Islamic Law (Sharia) Principles: Fundamental legal principles affecting contract formation, interest (riba), and dispute resolution
Competition Law (Royal Decree No. M/75): Regulations regarding market competition and anti-monopoly provisions in the energy sector
VAT Law (Royal Decree No. M/113): Tax implications for power purchase agreements and energy sales
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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