The following Energy practice note Produced in partnership with Jonathan Brufal and James Bruce of Gowling WLG provides comprehensive and up to date legal information covering:
Operation and maintenance (O&M) of renewable energy projects is a critical component of an effective and successful project. Although capital expenditure typically makes up the bulk of the costs, the O&M still contributes significantly to the calculation for the levelised cost of electricity. Having an effective O&M strategy can enhance the competitiveness and make the investment case for renewable energy projects.
The nature of O&M services varies between renewable energy technologies; photovoltaic (PV) solar requires a very different scope of services to offshore wind and has different practical challenges to overcome. The key terms will also vary between jurisdictions, and the depth of the market for the provision of such services. As operational renewable projects increase in scale and number, so the O&M industry increases in scale and sophistication.
We consider here some of the key issues in O&M contracts in renewable energy for both the O&M contractor and the project company owning the project. This is neither an exhaustive list, nor will each issue apply to every renewable project.
For many renewable energy projects, just as for conventional power projects, it is common to see a long term O&M Contract, with an O&M contractor, for the operation and maintenance of the facility. A single O&M contractor would provide the full suite of services necessary to operate and maintain the project. The initial
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