Project structure for renewable energy projects
Produced in partnership with Matthew Collinson of Igloo Energy
Project structure for renewable energy projects

The following Energy practice note Produced in partnership with Matthew Collinson of Igloo Energy provides comprehensive and up to date legal information covering:

  • Project structure for renewable energy projects
  • How are renewable energy projects typically structured?
  • Diagram A: Typical project structure for renewable energy projects
  • Power purchase agreement
  • Grid connection agreement
  • Fuel supply contract
  • Operation and maintenance contract

How are renewable energy projects typically structured?

Renewable energy projects are often project financed. A special purpose vehicle (SPV) will be incorporated to enter into the principal contracts for the project and to own the resulting assets. Construction and operation will typically be outsourced, and contractors will often be required to provide direct agreements to the funders to allow step-in (these contracts are not shown on Diagram A).

Diagram A: Typical project structure for renewable energy projects

Although the project structure will be broadly similar for most types of renewable energy projects, there are some key differences driven by the type of generator that is to be built.

Funders of a generator that requires fuel will typically require a fuel-supply agreement to be in near-final form (if not complete) before financial close, as the generator cannot deliver on its power purchase agreement (the key revenue document) without fuel to run the generator. While some generators will pay for their fuel supply, some generators (eg, energy-from-waste generators including some anaerobic digestion plant) will charge their fuel supplier a ‘gate fee’ for taking and disposing of the supplier’s refuse. On whatever basis the fuel is provided, the generator will need a store of fuel near to the generator for operational purposes, and this will drive a need for additional long-term property and access arrangements.

Offshore projects add a number of additional

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