PM109 Power Purchase Agreement

Transcription

1 PM109 Power Purchase Agreement PM109 Rev.001 CMCT COURSE OUTLINE Page 1 of 6

2 Training Description: There are many moving pieces affecting the future electric power development in Emerging Market. Unlike the past Independent Power Project models, which featured standardized take-or-pay contracts today s market demands more innovative incentives to ensure better availability, better performance as well as more attractive and sustainable mixtures of fuel resources. Economies throughout the region urgently needed to master the key tools, models and lessons learned for transforming and strengthening today s electricity sector. These include the latest models in negotiating Power Purchase Agreements (PPAs) in designing and managing new competitive power markets, as well as attracting the right mix of renewable energy resources. This intensive course focuses on examining the various structures of Power Purchase Agreements (PPAs) and how they fit together to allocate and mitigate risk. During the course, participant will examine a number of real life PPAs to understand each of their components and the reasons behind their structure. The course will start with a simple PPA and the participants will develop the schedules of the PPA to account for the additional complexities found in real life projects to ensure that the PPA remains bankable. During the course, we will also identify areas of the PPA that may be subject to negotiation and where the boundaries of those negotiations may lie. After the course, participants should be able to review PPAs with the ability to understand the reasons behind key aspects as well as being able to spot common omissions and avoid common mistakes. Training Objective: By the end of the training, participants will be able to: Learn how a PPA fits into the package of contracts required to develop a project Examine at the range of technology options for conventional and renewable projects Look at various PPA structure options, including tolling contracts, contract for differences (CFD) and feed in tariffs Discover the timeline of developing a power project and what can alter that timeline Compare project funding options and their effect on the PPA Risk allocation and risk mitigation measures in a PPA Examine basic tariff elements and the reason for their structure Look at typical demand profiles Investigate the economics of dispatch, including spark spread Discuss dispatch methodologies and mechanics Learn how to deal with imbalance payments in a PPA Look at testing regimes before and after the commercial operation date Understand the application of indexation in a PPA and how to deal with multiple currencies Structuring and sizing bonus and penalty mechanisms within a PPA Dealing with plant degradation and atmospheric conditions Look at how we can allow for plant upgrades and modification during the PPA Ensuring that the PPA reflects the maintenance scheduling and dispatch profile of the plant PM109 Rev.001 CMCT COURSE OUTLINE Page 2 of 6

3 Examine how the value of a PPA can be assessed Discuss dispute resolution between parties of a PPA Pricing the transfer of the plant at the end of the term or in the event of default Examine the reasons behind refinancing and how any refinancing gains can be shared Training Designed for: This course is intended for Contract/Agreements Specialists, Negotiators, Legal Advisors, Regulation & Compliance, Policy Analysts, Business Development Managers, Commercial Managers, Finance Controllers/Treasurers, Corporate Planners, Business and Accounting Analysts, Auditors & Risk Managers, Sales & Trading Managers, Structured/Trade Finance Managers, Project Managers, Economists, Investors. Also, this course is intended for sectors in Electric Regulators & Ministries, Electric, Power & Utilities companies, IPP Developers, Bank/Investors, Energy Supply Company (Oil, Gas, Coal and Renewables) Fuel suppliers and Other power service providers. Training Program: DAY ONE: PRE-TEST Introduction to the course Global Trends Driving Power Purchase Agreements (PPAs) Electricity Market Designs & Merchant Power Investments The basics of contractual structures and cashflows: o How the PPA fits into the suite of contracts required when developing a project. Technologies for power generation: Conventional Renewable Comparison of start rates, control of output and storage Requirement for generation mix in a network Alternative PPA structures: Tolling contracts Contract for Differences (CFD) Feed in tariffs Project funding options and their effect on the PPA: Corporate finance Project finance The Components of a PPA: Examine the overall structure of a PPA contract and discover how to find the key information Look at the key definitions, body of the contract and schedules PM109 Rev.001 CMCT COURSE OUTLINE Page 3 of 6

4 DAY TWO: Contract timings: Key definitions and events of the project timeline Examine effects that can adjust the timeline, including delays and Force Majeure The life of a PPA: Negotiation Financial close, construction through to operation Modification and upgrades Termination Extension Completion Risk Allocation and Mitigation Principals: Look at a project risk matrix and discuss how various risks are allocated in a Project Finance Structure and mitigated against in a PPA The basic tariff structure: Measurement and definition of capacity, availability and output Discuss the key fixed and variable elements of a tariff structure and how they relate to the underlying costs of the project company DAY THREE: Demand profiles: Types of operation The economics of dispatch Spark spread Imbalance charges Ancillary services Dispatch Instructions: Examine how the off-taker instructs the plant to run and how this can affect the tariff Discuss what happens when the full availability of the plant isn t utilised and the application of reliability factors Examine various types of running: base load, mid-merit and peaking Typical maintenance programs for power generation plant Using seasonal weighting factors in a PPA Examine what elements should be included in start costs Dealing with the effects of varying dispatch and maintenance scheduling on availability using dynamic availability calculations Fuel supply: Look at Fuel Supply Agreements and Tolling contracts Examine the requirements for fuel specifications and quality within the PPA Plant testing: Acceptance testing Performance testing Metering PM109 Rev.001 CMCT COURSE OUTLINE Page 4 of 6

5 Indexation in a PPA: Discover why indexation is applied in a PPA The choice of indexes to apply to tariff components How to apply indexation in a contract The multiple currency PPA, why they exist and how they are implemented DAY FOUR: Bonus and Penalty mechanisms: Why are bonus and penalty mechanisms required? How are bonuses and penalties sized? The basics of availability adjustment mechanisms Heat rate and fuel penalty mechanisms Liquidated damages under a PPA Dealing with degradation and atmospheric conditions: Explanation of degradation curves and how they are applied in a PPA Look at how a power plant s output and efficiency vary with atmospheric conditions and how this is dealt with in a PPA Adjusting the tariff for running at part load Plant upgrades and modifications: Why may upgrades and modifications be required? Adjusting the tariff Change of law provisions in the PPA Financial evaluation of a PPA: Use of financial models Project returns Levelised tariff calculation and evaluation Dispute resolution: Arbitration and use of an expert DAY FIVE: Events of default and termination: Typical causes of default Discuss approaches to the calculation of breakage costs or transfer price Refinancing The reasons for refinancing and its effects How to calculate and share refinancing gain The completed PPA A look at a completed PPA and how it relates to each of the aspects covered in the course Course Conclusion POST-TEST and EVALUATION PM109 Rev.001 CMCT COURSE OUTLINE Page 5 of 6

6 Training Requirement: Hand s on practical sessions, equipment and software will be applied during the course if required and as per the client s request. Training Methodology: This interactive training course includes the following training methodologies as a percentage of the total tuition hours:- 30% Lectures, Concepts, Role Play 30% Workshops & Work Presentations, Techniques 20% Based on Case Studies & Practical Exercises 20% Videos, Software & General Discussions Pre and Post Test Training Certificate(s): Internationally recognized certificate(s) will be issued to each participant who completed the course. Training Fees: As per the course location - This rate includes participant s manual, hand-outs, buffet lunch, coffee/tea on arrival, morning & afternoon of each day. Training Timings: Daily Timings: 07:45-08:00 Morning Coffee / Tea 08:00-10:00 First Session 10:00-10:20 Recess (Coffee/Tea/Snacks) 10:20-12:20 Second Session 12:20-13:30 Recess (Prayer Break & Lunch) 13:30-15:00 Last Session For training registrations or in-house enquiries, please contact: Aisha Relativo: aisha@cmc-me.com Tel.: or Mob.: Training & Career Development Department PM109 Rev.001 CMCT COURSE OUTLINE Page 6 of 6