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Power Purchase Contract

Power Purchase Contract Template for Saudi Arabia

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Key Requirements PROMPT example:

Power Purchase Contract

"I need a Power Purchase Contract under Saudi Arabian law for a 500MW solar power project in Riyadh, with commercial operations starting in March 2025, including specific provisions for environmental credits and grid connectivity requirements."

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Document background
The Power Purchase Contract serves as the primary commercial agreement in power generation projects within Saudi Arabia, establishing the legal and commercial framework for electricity sales. This document is essential for independent power producers, utilities, and industrial facilities engaging in power generation and sale activities in the Saudi market. The agreement must comply with Saudi Arabian electricity laws, ECRA regulations, and environmental requirements while incorporating international best practices in power purchase agreements. It typically includes detailed provisions for power delivery obligations, pricing mechanisms, performance standards, and risk allocation, with specific attention to local content requirements and Saudi Vision 2030 energy objectives. The document is crucial for project financing and typically requires approval from relevant regulatory authorities.
Suggested Sections

1. Parties: Identification of the power producer and the purchaser, including their legal status and authority to enter into the agreement

2. Background: Context of the agreement, including project overview, facility location, and regulatory framework

3. Definitions and Interpretation: Comprehensive definitions of technical and legal terms, and rules of interpretation

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

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

6. Facility Development and Construction: Requirements for construction, testing, and commissioning of the power facility

7. Operation and Maintenance: Standards for facility operation, maintenance requirements, and performance guarantees

8. Metering and Testing: Requirements for measuring and verifying electricity delivery

9. Billing and Payment: Payment terms, calculation of charges, invoicing, and payment procedures

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

11. Default and Termination: Events of default, cure periods, and termination rights

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

13. Insurance: Required insurance coverage and related obligations

14. Assignment and Change of Control: Restrictions and conditions for transfer of rights or ownership changes

15. Dispute Resolution: Procedures for resolving disputes, including Saudi law requirements

16. Governing Law: Confirmation of Saudi law as governing law and related legal requirements

17. Notices: Procedures for formal communications between parties

18. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments

Optional Sections

1. Interconnection: Detailed provisions regarding grid connection, used when the producer is responsible for interconnection

2. Fuel Supply: Terms related to fuel supply and management, included for conventional power plants

3. Environmental Credits: Provisions regarding carbon credits or environmental attributes, included for renewable energy projects

4. Government Guarantees: Provisions regarding government support or guarantees, included when applicable

5. Local Content: Requirements for local content and Saudi employment, included when required by regulations

6. Currency and Exchange Rate: Provisions for handling multiple currencies, included in international projects

7. Step-in Rights: Lender's step-in rights, included when project financing is involved

8. Capacity Trading: Provisions for trading excess capacity, included in merchant plant arrangements

Suggested Schedules

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

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

3. Performance Standards: Required technical and operational performance levels

4. Tariff and Payment Calculations: Detailed formulas and mechanisms for calculating payments

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

6. Grid Code Requirements: Technical standards for grid connection and operation

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

8. Insurance Requirements: Detailed specification of required insurance coverage

9. Environmental and Social Requirements: Environmental standards and social responsibility obligations

10. Operating Procedures: Detailed procedures for day-to-day operation and maintenance

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

12. Interconnection Requirements: Technical specifications for grid interconnection

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
Availability
Availability Factor
Base Load
Capacity
Commercial Operation Date
Commissioning
Competent Authority
Connection Point
Contract Year
Deemed Generated Energy
Dispatch Instructions
ECRA
Effective Date
Electrical Energy
Emergency
Energy Charge
Environmental Laws
Facility
Force Majeure Event
Fuel
Good Utility Practice
Grid
Grid Code
Guaranteed Energy Production
Heat Rate
Initial Operation Date
Interconnection Facilities
Law
Lenders
Maintenance Schedule
Metering Point
Metering System
Minimum Functional Specifications
Net Electrical Output
Operating Parameters
Operating Procedures
Outage
Performance Security
Performance Tests
Point of Delivery
Power Purchase Price
Preliminary Notice
Project
Project Agreements
Project Company
Prudent Utility Practice
Purchase Price
Purchaser Event of Default
Reactive Power
Required Commercial Operation Date
Saudi Vision 2030
Scheduled Maintenance
Seller Event of Default
Site
Station Load
Step-In Rights
System Emergency
Tariff
Technical Limits
Term
Termination Notice
Testing
Transmission System
Unit
Unit Commitment
Clauses
Conditions Precedent
Sale and Purchase Obligations
Term and Duration
Construction and Development
Testing and Commissioning
Performance Standards
Operating Standards
Metering and Measurements
Invoicing and Payment
Force Majeure
Change in Law
Default and Termination
Dispute Resolution
Governing Law
Assignment
Confidentiality
Representations and Warranties
Insurance
Environmental Compliance
Health and Safety
Grid Connection
Maintenance Requirements
Emergency Procedures
Security Arrangements
Intellectual Property
Local Content Requirements
Indemnification
Liability Limitations
Records and Audit Rights
Notices
Step-in Rights
Decommissioning
Capacity and Energy Commitments
Price and Payment
Fuel Supply Interface
Performance Testing
Grid Code Compliance
Technical Specifications
Regulatory Compliance
Transfer Restrictions
Change of Control
Relevant Industries

Energy & Utilities

Power Generation

Renewable Energy

Infrastructure

Industrial Manufacturing

Oil & Gas

Construction

Environmental Services

Financial Services

Legal Services

Insurance

Project Finance

Relevant Teams

Legal

Finance

Operations

Commercial

Risk Management

Environmental Compliance

Regulatory Affairs

Technical Services

Project Management

Business Development

Procurement

Health & Safety

Energy Trading

Corporate Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Chief Technical Officer

Project Director

Commercial Manager

Legal Counsel

Contract Manager

Energy Trading Manager

Risk Manager

Environmental Compliance Manager

Project Finance Manager

Operations Manager

Technical Manager

Regulatory Affairs Manager

Business Development Director

Power Plant Manager

Energy Markets Analyst

Procurement Manager

Health & Safety Manager

Industries
Electricity Law (Royal Decree No. M/56): The primary legislation governing the electricity sector in Saudi Arabia, establishing the framework for power generation, transmission, and distribution
Implementation Regulations of the Electricity Law: Detailed regulations that specify the technical and operational requirements for power generation and sales
ECRA (Electricity & Cogeneration Regulatory Authority) Regulations: Regulatory framework for licensing, tariffs, and technical standards in the power sector
Saudi Commercial Law (Royal Decree No. M/32): Governs commercial transactions and contracts in Saudi Arabia, providing the legal basis for business agreements
Environmental Protection Law (Royal Decree No. M/34): Establishes environmental standards and requirements for power generation facilities
Grid Code: Technical requirements and standards for connection to and use of the electricity transmission system
Competition Law (Royal Decree No. M/75): Regulates market competition and prevents monopolistic practices in the power sector
Foreign Investment Law (Royal Decree No. M/1): Relevant for international investors participating in power generation projects
National Renewable Energy Program (NREP) Framework: Specific regulations and requirements for renewable energy projects and their power purchase agreements
Saudi Vision 2030 Energy Sector Regulations: Strategic framework and regulations aligned with Saudi Arabia's vision for energy sector development
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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