Considering the significant initial investment of renewable energy power plants, investors demand long-term assurance of its capability to sell the power it produces.
It is usually achieved through a long-term power purchase agreement. Almost 95% of newly built power plants are financed on the back of a power purchase agreement.
This live online training will give you clear explanations of the models of PPA structure from the traditional model to corporate PPAs, risk allocation, project preparation, negotiation application, and management of competitive energy markets, appealing to private investment in renewable energy, through a series of real-world examples of contracts and markets.
What you will learn?
- Several types of PPA and their usage in various markets
- All the key elements of corporate renewable energy PPAs
- How to conduct a policy and risk analysis of PPAs
- How PPAs can mitigate risk and facilitate project financing
- Core legal provisions of PPAs and how they are applied in practice
- Led successful power project finance transactions
- Negotiate fair and sustainable PPAs
- PPA best financial practices
How it works?
3rd – 7th of October 2022
The online training will take place over 5 days and it will be lasting 3 hours.
The session will be recorded and sent out to all registered delegates.
Once you’ve registered for the training, we will email you with all information and login credentials.
- Power plant project, contributors, stages
- What is a PPA?
- PPA objectives and risks
- PPA – key features
- Related documents
Power Plant market characteristics
- Power Plant technologies
- Power evaluation
- Market structure
- Categories of the Power Purchase Agreement
Session 2, 3h
Utility and corporate renewable PPA structures
- Definition of commercial terms
- Merchant vs. PPA structure
- Identification and uses of diverse types of PPA
- Power project timeline and significance of PPAs
- Role of PPAs in the boarder context of a project finance transaction
Session 3, 3h
PPA risk assessment and valuation
- Development risk
- Performance risk
- Volume risk
- Shape or profile risk
- Balancing risk
- Credit risk
- Tenor and price risk
- Change in law risk
- Force majeure risk
PPA pricing structure
- Understanding Levelized Cost of Electricity
- Cost of Capital and their impact on tariffs Tariff Structures for fuel-based and intermittent power generation technologies
- Take-or-Pay versus Take-and-Pay contracts
- Capacity and Energy Charge and Pass-Through Clauses
- The rationale for indexation and escalation of local, foreign inflation, and currencies
- Seasonal weighting factors in a PPA
- Wholesale power price linked PPA
- Forecast wholesale price uncertainty and fixing the strike price
- Locational Marginal Pricing and grid charges
- Competitive Tenders for Tariff with Cost Openers
- Marginal Cost and the Merit Order Effect in competitive wholesale electricity markets
Session 4, 3h
PPA contracts and risk mitigation
- Counterparty risk and long-term creditworthiness of the generator and off-taker
- Power consumption load profile and changes over time
- Additionality and Guarantee of Origin
- Scheduling and balancing risks
Session 5, 3h
Negotiations and dispute resolution
- Negotiate the Best PPA
- Prepare a Term Sheet
- Set Framework for Negotiations
- Balance Buyer’s and Seller’s Needs
- Know your BATNA
- Focus on Interests, not Positions
- Reach Sustainable Agreement
- Dispute Resolution
- Different Types of Dispute Resolution
- Expert Determination
The agenda will combine presented materials with plenty of opportunities for Q&A, interactive discussions, and the use of quantitative models to illustrate key learning points. Current market examples and data are utilized wherever helpful.
After successful completion of this training, you will be awarded a Certificate of Attendance.