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Direct Power Purchase Agreement

Direct Power Purchase Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Direct Power Purchase Agreement

"I need a Direct Power Purchase Agreement for a 50MW solar power facility in Riyadh, Saudi Arabia, to supply electricity to our manufacturing plant, with operations expected to commence in March 2025 and a contract duration of 15 years."

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Document background
The Direct Power Purchase Agreement (PPA) is a crucial contract structure in Saudi Arabia's evolving energy market, enabling private power producers to sell electricity directly to corporate consumers. This arrangement has gained significant importance with Saudi Arabia's Vision 2030 initiative, which aims to increase private sector participation in the power sector and promote renewable energy development. The document serves as the primary commercial agreement governing the long-term sale and purchase of electricity, typically used for industrial facilities, commercial establishments, and renewable energy projects. It includes comprehensive provisions covering technical, operational, and commercial aspects of power supply, ensuring compliance with Saudi regulatory requirements while providing certainty for both producers and purchasers regarding their rights and obligations.
Suggested Sections

1. Parties: Identification of the power producer and the purchaser, including their legal status and registered addresses

2. Background: Context of the agreement, including facility details and parties' objectives

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement and rules of interpretation

4. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of electricity, including minimum purchase commitments

5. Term and Effective Date: Duration of the agreement, conditions precedent, and effective date

6. Delivery Point and Title: Specification of the delivery point and transfer of title to electricity

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

8. Pricing and Payment: Pricing structure, billing procedures, and payment terms

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

10. Performance Standards: Required technical and operational standards for the facility

11. Maintenance and Outages: Scheduled maintenance procedures and handling of outages

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

13. Default and Termination: Events of default, remedies, and termination procedures

14. Liability and Indemnification: Allocation of risks and responsibilities between parties

15. Insurance: Required insurance coverage and related obligations

16. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law

17. Confidentiality: Protection of confidential information

18. Notices: Requirements for formal communications between parties

19. Miscellaneous: Standard boilerplate provisions including assignment, amendments, and severability

Optional Sections

1. Construction and Development: Required if the generating facility is not yet operational, detailing construction milestones and requirements

2. Interconnection: Include if the agreement needs to address grid connection responsibilities and requirements

3. Renewable Energy Certificates: Include for renewable energy projects to address ownership and trading of environmental attributes

4. Change in Law: Detailed provisions for handling regulatory changes, particularly relevant in evolving renewable energy markets

5. Export/Import Requirements: Include if power will cross national boundaries or involve multiple grid systems

6. Local Content Requirements: Include if subject to Saudi Arabia's local content requirements under Vision 2030

7. Battery Storage: Include for projects incorporating energy storage systems

8. Forecasting and Scheduling: Required for variable renewable energy sources like solar or wind

9. Step-in Rights: Include if required by lenders or for critical power supply arrangements

Suggested Schedules

1. Facility Description: Detailed technical specifications of the generating facility

2. Testing Procedures: Procedures for acceptance testing and periodic performance tests

3. Operating Parameters: Technical and operational parameters including capacity and availability requirements

4. Pricing Schedule: Detailed pricing calculations, adjustments, and examples

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

6. Performance Standards: Detailed technical standards and requirements for facility operation

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

8. Grid Connection Requirements: Technical specifications for grid interconnection

9. Operating Procedures Manual: Detailed procedures for day-to-day operations and communications

10. Environmental Standards: Specific environmental requirements and compliance standards

11. Local Content Requirements: Detailed requirements for meeting Saudi local content obligations

12. Form of Direct Agreement: Template agreement between lenders, power producer, and purchaser

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
Actual Delivered Energy
Affiliate
Agreement
Annual Contract Quantity
Applicable Law
Availability
Billing Period
Business Day
Capacity
Change in Law
Commercial Operation Date
Competent Authority
Confidential Information
Contract Year
Delivery Point
Dispatch Instructions
ECRA
Effective Date
Electricity Law
Emergency
Energy Charge
Environmental Attributes
Event of Default
Facility
Force Majeure Event
Good Industry Practice
Grid
Grid Code
Interconnection Agreement
Invoice
KSA
Lenders
Maintenance Schedule
Metering Point
Metering System
Minimum Take-or-Pay Quantity
Monthly Payment
Operating Parameters
Operating Procedures
Outage
Performance Security
Planned Maintenance
Point of Connection
Power Purchase Price
Prudent Operating Practice
Reactive Power
Regulatory Authority
Required Commercial Operation Date
Saudi Grid Code
Scheduled Outage
Site
Specified Facilities
System Emergency
Term
Testing
Transmission System
Unit
Unplanned Outage
VAT
Voltage
Clauses
Interpretation
Conditions Precedent
Term and Duration
Sale and Purchase Obligations
Delivery Obligations
Connection and Metering
Testing and Commissioning
Operating Standards
Maintenance
Pricing and Payment
Invoicing
Performance Security
Force Majeure
Change in Law
Default and Termination
Liability and Indemnification
Insurance
Assignment and Transfer
Confidentiality
Dispute Resolution
Governing Law
Environmental Compliance
Health and Safety
Regulatory Compliance
Records and Audit
Notices
Representatives
Local Content Requirements
Emergency Procedures
Grid Connection
Performance Standards
Technical Requirements
Quality Standards
Reporting Requirements
Anti-corruption
Warranties
Intellectual Property
Data Protection
Security
Step-in Rights
Decommissioning
Relevant Industries

Energy & Utilities

Renewable Energy

Manufacturing

Industrial

Mining

Commercial Real Estate

Data Centers

Healthcare

Retail

Telecommunications

Relevant Teams

Legal

Finance

Operations

Commercial

Risk Management

Environmental Compliance

Technical Operations

Project Development

Procurement

Regulatory Affairs

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Head of Energy Procurement

Sustainability Director

Power Plant Manager

Commercial Director

Risk Manager

Environmental Compliance Manager

Technical Operations Manager

Project Finance Manager

Regulatory Affairs Director

Contract Manager

Energy Trading Manager

Chief Technical Officer

Industries
Electricity Law (Royal Decree No. M/56): Primary legislation governing the electricity sector in Saudi Arabia, establishing the regulatory framework for generation, transmission, and distribution of electricity
Electricity & Co-generation Regulatory Authority (ECRA) Regulations: Regulatory framework for licensing, technical standards, and operational requirements for power generation and distribution
Vision 2030 Renewable Energy Initiative: National strategic framework setting targets for renewable energy development and private sector participation in the power sector
Commercial Court Law (Royal Decree No. M/93): Governs commercial transactions and dispute resolution mechanisms for business contracts including power purchase agreements
Foreign Investment Law (Royal Decree No. M/1): Regulates foreign investment in Saudi Arabia, including investment in power generation projects and related agreements
Environmental Law (Royal Decree No. M/165): Sets environmental protection requirements and standards that must be considered in power generation projects
Competition Law (Royal Decree No. M/75): Ensures fair competition in the market and regulates anti-competitive practices in the power sector
General Environmental Regulations: Detailed environmental standards and requirements for power generation facilities, including emissions and waste management
Saudi Grid Code: Technical requirements and standards for connection to and operation within the Saudi electricity grid
Public Private Partnership (PPP) Law: Framework for private sector participation in infrastructure projects, including power generation and distribution
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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