Power Purchase Agreement (PPA)

Why Select this Training Course?

A power purchase agreement (PPA) is a bilateral or multilateral contract between a renewable energy producer and a large electricity user. It outlines the terms under which the user agrees to buy electricity from the producer at a particular price. A PPA is the sale of a project and its elements, as it involves a contractual arrangement that allows a renewable producer to determine the feasibility and prospects of the project and the level of investment risk. The Rcademy Power Purchase Agreement (PPA) course exposes participants to an in-depth analysis of PPAs in conventional and renewable energy projects. It also explores the rapid evolution that occurs daily due to technological evolution and the growing reduction in the commercial viability gap.

This course also discusses the PPAs for corporations and synthetic PPAs in detail. An extensive exploration of business and strategic tenets of power purchase agreements is conducted as part of this course. Initially, renewable technologies were historically less feasible than conventional ones. However, this gap has closed over time. Consequently, PPAs will require a structure that deviates from traditional technologies to address the new reality. To evaluate and manage risks in various kinds of PPAs, the fundamental aspects of different power purchase agreements are studied in detail throughout the course. This training course aims to facilitate the understanding of new models of PPA risk transfer, building and overseeing high-performance markets and promoting private investments in renewable energy practices through several potential contract and trade case scenarios.

What is the difference between a virtual Power Purchase Agreement and a sleeved Power Purchase Agreement?

The primary difference between a sleeved PPA (corporate PPA) and a virtual PPA is how the energy is handled within the grid and its distribution format. In a sleeved PPA, the producer selling the power will transmit the energy to the grid, and the power delivered will go to the off-taker.

A virtual PPA entails that the energy is not physically supplied to the off-taker / recipient, and there is no need for both to have a common distribution feeder. A virtual PPA can hence be described as a financial transaction where the produced electricity does not physically get delivered to the customer. The energy is delivered to the supplier, and the off-taker commits himself to purchasing a specified amount of energy. RECs and certificates are exchanged to certify that one has bought renewable power.

What is the downside of a Power Purchase Agreement?

You won’t own the solar system. A PPA means that you will be exactly paying the provider of renewable energy for the energy they have supplied. As a result, you will not be able to enjoy other privileges of having a solar system, for instance, getting tax incentives or being paid by the utility company for the excess energy from renewable resources.

Who Should Attend?

The Rcademy Power Purchase Agreement (PPA) training course is designed for a wide range of professionals which include;

• Lawyers, legal consultants, and other representatives from various organisations that offer services to businesses.
• Managers who analyse financial information to help in decision-making and policy formulation in organisations.
• Supervisors who bear the responsibility of coordinating and leading the process of designing and marketing business products or services.
• Top and junior administrative officers who oversee the administrative and managerial aspects of commercial businesses.
• Experts and specialists who offer advice to companies on a plethora of issues, such as business management and law.
• People involved in drafting, bargaining, and supervising commercial agreements.
• Employees who are involved in the planning, sourcing, procurement or any other corporate funds used in implementing the business development strategies.

What are the Course Objectives?

The Rcademy Power Purchase Agreement (PPA) training course is designed to help participants;

• Familiarise with the clauses in the PPA and how they can boost and protect the project’s revenues.
• Learn more about different types of PPA and how they are utilised within different areas of the economy.
• Spearhead the development of innovation in handling claims and conflicts.
• Learn more about PPA as an essential component of Risk management within a project.
• Understand all phases of PPA, including discussion, construction, and administration.
• Acquire some negotiation skills as a way of enhancing the benefits of a PPA.

How will this Course be Presented?

This course is designed with participants in mind, aiming to meet their needs and help them learn new skills. It uses practical methods to keep participants actively learning and engaged. Most importantly, experienced professionals teach every module with the most methods based on thorough research in the field.

The Rcademy Power Purchase Agreement (PPA) Training Course combines practical and theoretical learning. Participants will receive slides, lecture notes, case studies, video presentations, and real-life examples. They will also engage in quizzes, seminars, and practice sessions. There is a platform for participants to give feedback and ensure they are satisfied with the course.

What are the Topics Covered in this Course? 

Module 1: Introduction to Power Purchase Agreements

• Definition and purpose of a PPA
• History and evolution of PPAs
• Types of PPAs (e.g., physical vs. virtual PPAs)

Module 2: The Role of PPAs in the Energy Market

• Importance of PPAs in renewable energy projects
• Stakeholders involved (developers, off-takers, financiers, regulators)
• Market trends and future outlook

Module 3: Contractual Structure

• Overview of the PPA document
• Term sheet and its importance
• Key clauses and their implications

Module 4: Detailed Analysis of PPA Clauses

• Term and Termination
• Pricing and payment terms
• Delivery and performance guarantees
• Force majeure and change in law provisions

Module 5: Project Financing and PPAs

• Role of PPAs in securing project financing
• Financial models and considerations
• Tariff structures and price setting

Module 6: Financial Risks and Mitigation

• Credit risk assessment
• Hedging strategies
• Financial due diligence

Session 7: Legal Framework and Regulatory Environment

• Overview of relevant laws and regulations
• Licensing and permitting
• Compliance requirements

Module 8: Legal Obligations in Assignments

• Monitoring, verification, and quantification
• Responsibilities of the buyer
• Payment integrity
• Timing considerations for transactions
• Minimising risks

Module 9: Significance of Terms in a Power Purchase Agreement (PPA)

• Extending contract durations
• Ensuring competency
• Responsibilities for exploration and innovation by the Special Purpose Vehicle (SPV)
• Utilisation of power and licensed resources
• Handling claims and representations

Module 10: Commencement of Testing and Commercial Operations

• Causes for breach and immediate termination rights
• Rights to terminate for buyers
• Exceptions for unforeseen events
• Accountability and resolution
• Legal amendments

Module 11: Evaluation of Risks

• Mitigation of delay and efficiency losses
• Performance guarantees
• Dealing with budget overruns and change requests
• Mitigating political risks
• Addressing foreign exchange fluctuations
• Meeting transportation needs

Module 12: Industrial Components of a PPA

• Considerations for taxation, costs, and quantities
• Continuous monitoring
• Fulfilment of commitments
• Risk management

Module 13: Contract Drafting and Negotiation

• Best practices in contract drafting
• Negotiation techniques and strategies
• Common legal pitfalls and how to avoid them

Module 14: Optimising PPA Negotiations

• Formulate a settlement agreement
• Develop a negotiation framework
• Harmonise buyer and seller requirements
• Secure a sustainable long-term agreement

Module 15: New and Emerging Technologies

• Aggregation and flexibility
• Innovative contract structures
• Green financing
• Community-based PPAs