Gas peaking projects—key project issues relevant to project financing
Produced in partnership with Dentons UKMEA LLP
Gas peaking projects—key project issues relevant to project financing

The following Energy guidance note Produced in partnership with Dentons UKMEA LLP provides comprehensive and up to date legal information covering:

  • Gas peaking projects—key project issues relevant to project financing
  • Introduction
  • Property and planning issues
  • Electricity grid and gas connection routes
  • Power purchase
  • Operation and maintenance

STOP PRESS: As of 1 April 2019, National Grid Electricity System Operator (NGESO) became a separate legal entity within the National Grid Group, separating the system operator (SO) and transmission owner (TO) roles previously held by National Grid Electricity Transmission plc (NGET). NGESO now takes on the role of SO, while NGET will continue to act as TO. As a result, this Practice Note is currently being updated. For more information on the effect of the split, see Practice Note: The Split of National Grid’s Transmission Owner (TO) and System Operator (SO) Roles and Licences.

Author: James Todd. With thanks to David Cruickshank and Jamie Dunne

Introduction

The purpose of this note is to discuss key issues which are relevant to the project financing of gas peaking generation projects (also often referred to as ‘gas peakers’). The note will focus on possible ways to ensure stable revenue streams for these projects and how to minimise liability for, and maximise visibility of, costs. In general we do not report on more standard contractual positions eg whether security may or should be sought from counterparties, assignment in security, drafting of funder direct agreements or collateral warranties etc although these are also relevant and should be considered by legal advisers where appropriate. For an introduction to the key documents associated with project financing,