Philippines Sample PPAs
The Energy Regulatory Commission (“ERC”) has published standard documentation for the offtake of electricity from Renewable Energy (“RE”) Plants eligible for the Philippine Feed-in Tariff (“FiT”) system. The principal agreement is the Renewable Energy Payment Agreement (“REPA”) under which TransCo (the FiT Allowance Administrator) pays the owner of the eligible RE Plant (RE Developer) the FiT rate for the plant’s metered energy output. The economic function of the REPA is broadly analogous to a synthetic PPA with private hedge counterparties, which are used in more established electricity markets, to provide revenue stability for the project (see Synthetic PPAs). Separately, where a RE Plant does not operate in the Philippine Wholesale Electricity Spot Market (“WESM”), the RE Developer and local host distribution utility (“DU”) must enter into a Renewable Energy Supply Agreement (“RESA”) for the offtake of electricity generated by the plant.
Key features of the sample PPAs published by ERC:
- FiT Eligibility Period – the RE Plant is entitled to FiT payments for a period of 20 years from when it achieves commercial operation.
- Payment mechanisms – the RE Developer is paid at the FiT rate for all metered energy output from the RE Plant. The electricity price payable by the offtaker (e.g. the local host distribution utility under a RESA) is not directly paid to the RE Developer, but remitted to TransCo, which then pays that to the RE Developer as part of the FiT payment.
- Supply of Actual RE Generation – supply of RE electricity into the relevant transmission or distribution grid (“Actual RE Generation”) is on a “non-firm”, “as available” and “variable” basis.
- Obligations of the RE Developer – key obligations of the RE Developer include:
- generating all Actual RE Generation exclusively from the eligible RE Plant in accordance with the type of renewable resource for which it has been issued a FiT Certificate of Compliance (“COC”);
- submitting annual forecasts of its Annual RE Generation for the succeeding year to the Host DU; or
- maintaining the validity of its FiT COC during the term of the RESA.
RE Developer Defaults – if:
- the FiT COC of the RE Plant is revoked or terminated; or
- the RE Plant generates electricity from a source other than the RE resource for which it has been issued a FiT COC and claims payment for such electricity.
TransCo (under the REPA) and the local host distribution utility (under the RESA) become entitled to terminate the REPA and RESA, respectively.
Find more @ Energy and Power PPPs
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