The importance of testing in energy projects
Produced in partnership with Clarke Willmott LLP
The importance of testing in energy projects

The following Construction guidance note Produced in partnership with Clarke Willmott LLP provides comprehensive and up to date legal information covering:

  • The importance of testing in energy projects
  • Background
  • FIDIC Silver Book testing procedures
  • Liquidated damages for delayed tests on completion
  • Failed tests on completion under FIDIC Silver Book
  • Take-over under FIDIC Silver Book
  • FIDIC Silver Book defects notification period
  • Tests after Completion under the FIDIC Silver Book
  • A consideration of other forms of contract
  • Practical considerations
  • more

Background

The performance output of an energy asset and the project's ability to generate the specified power output and revenue stream will typically dictate the amount which a funder is willing to invest.

It is crucial for both employers and funders that appropriate testing, take-over and defects procedures are incorporated into the construction contract to ensure maximum revenue and power output is obtained from the project and so that any problems in this regard are highlighted as early as possible.

This Practice Note focuses on the importance of testing procedures and defects mechanisms under the FIDIC Silver Book and other commonly used contracts in the energy sector and the practical considerations which need to be considered in energy projects. For a detailed introduction to the FIDIC Silver Book, see Practice Notes: FIDIC contracts—introduction to the Silver Book 2017 and FIDIC contracts—introduction to the Silver Book 1999.

FIDIC Silver Book testing procedures

The FIDIC Silver Book is one of the most widely used contracts for energy and engineering projects globally. It contains a standardised defects procedure, and regimes for performance testing and take-over. In 2017 FIDIC published a new version of the Silver Book—the testing provisions of which are very similar to those in the 1999 form. Clause references in this Practice Note refer to both the 1999 and 2017 editions