Implementation Agreement (Example 5)
Implementation Agreement (Example 5) – a “Build, Own and Operate” project agreement between the state government of South Australia and a private contractor (Tesla), for the construction and operation of a battery facility which will be used to store power from a nearby wind farm and provide various services to maintain system stability in South Australian’s electricity network.
In Australia, PPPs for conventional generation projects are less common as they are often privately financed. Rather, PPPs are more likely to be used for infrastructure projects of systemic importance (such as provisions of system stability services). The agreement provides a good illustration of a “light government touch” PPP project where the government assumes relatively little project (including regulatory) risk, which is reflective of Australia’s more market based energy sector:
• the state government is responsible for obtaining the main development approval required for the project;
• the private contractor is responsible for obtaining all other regulatory approvals required for the project (including registration to participate in the electricity market);
• the private contractor is responsible for site selection and land acquisition; and
• the state government may terminate the agreement in an event of default by the private contractor, but has no step in rights.
Find more @ Energy and Power PPPs
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