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Title: Spain Standardized Synthetic PPA

Language: English

Type: Document

Nature: Agreement

Published: August 17, 2021

Region: Europe and Central Asia (ECA)

Country: Spain

Sector: Energy and Power

Topic: Agreements

Keywords: PPPs by Sector *, Energy and Power PPPs **, Spain

Document(s):

Document Summary:

This document is developed as a sample agreement for a PPA in Spain for large scale renewable projects.  It provides a further example of how offtake arrangements for generation projects in more developed jurisdictions with market-oriented power sectors can be structured.  It sets out the draft terms of a synthetic (financial) PPA structured as a contract for differences with no physical delivery of electricity, consisting of the financial coverage of the price of energy, adjusting the differences between the Spanish wholesale market price and the agreed price.

Seller undertakes to develop renewable projects and Seller and Buyer agree to pay the corresponding monthly payments to the other party, as applicable arising from the differences between the agreed price and the Spanish wholesale market price.

Document Details:

Key features of the Standardized Synthetic PPA:

  • Conditions Precedent – the sample establishes standard conditions precedent to be fulfilled by Seller, such as obtaining from Financing Entities the necessary financial support for the construction of the Projects and to obtain all necessary permits for the construction and operation of the Projects.

  • Transfer of Guarantees of Origin – furthermore, Seller undertakes to assign to Buyer, as off-taker, the Guarantees of Origin related to the specific renewable projects included under the PPA (certificates assuring that a number of MW/hour of electricity produced by a given installation have been produced with renewable energy and which can be transferred to off-takers to justify the “green” nature of the electricity they sell).

  • Settlement – the sample foresees a standard settlement procedure for the calculation of the payments to be made between the Parties arising from the differences between the agreed price and the price of the wholesale Spanish Electricity Market.

  • Credit Support – Seller and Buyer undertake to obtain the necessary credit support for payments to be made under the contract for differences.

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