Power Purchase Agreements: Legal Issues, Risks Assessment & Investment Protection

In the face of the rising demand for electricity from power plants, including renewables, and the volatility of energy prices, Power Purchase Agreements (PPAs) are the key driver of the energy transition. PPAs provide a way for generator to finance their projects and for buyers to get price and quantity certainty over a defined period of time.

Based on Dr. Guy Block’s 35 years of experience in renewable energy projects, this book provides in its three parts:

1. An analysis of legal and bankability risks typically found in the development of renewable power projects: when entering into a PPA, the parties will need to take into account the various risks inherent to the PPA (credit, performance, price, liquidity, imbalance, changes in laws, force majeure). The allocation of risks between Parties is a crucial part of PPA negotiation.
2. Protection of PPAs as an investment under the International Centre for Settlement of Investment Disputes (ICSID) jurisdictions: as PPAs act as the cornerstone of any independent power generation project, PPAs do not only act as an instrument to purchase electricity, but as an instrument to finance energy projects. Whether or not a PPA is considered as a protected investment influences the willingness of investors to take part in a power project and the level of risk the Parties take in.
3. A worldwide review of PPAs standard clauses in Europe, Africa, America and Asia: PPAs are very diverse. Due to their technologically neutral nature, PPAs can be contracted for every energy source, renewable or else. Certain PPAs may contain specific clauses, for example hydroelectrical PPA and seasonal clauses, but the contractual instrument, the PPA, remain the same. In its third part, this book aims to show this diversity of PPAs by providing examples – models of the clauses that can be found in PPAs. 

Constituting an essential resource for anyone involved in the negotiation or drafting of PPAs, this book is intended for all practitioners, project developers and promoters, engineers, investment and private banks and public authorities involved in the development of renewable energy projects.