What to prepare for Power Purchase Agreement (PPA)

This article provides a comprehensive guide on how to prepare for a Power Purchase Agreement (PPA), advising owners to consult with experienced engineers or legal consultants. It details the necessary documents, reports, and studies needed to prevent unexpected negative consequences associated with PPAs, including environmental impact reports, power consumption analysis, energy audits, and more.

Unlike conventional capital intensive projects, power purchase agreement type contracts completely bypass proven engineering design measures, which involve project feasibility studies, preliminary design and econometric analysis, design documentation, construction documentation, design specification, and procurement evaluation (which are based on job specific criteria).

In order to ensure a measure of control and conformance to the project needs, it is recommended that the owners refer to an experienced consulting engineer or legal consultant who is familiar with power purchase agreement type projects.

  • For ground mount installations, employ the services of qualified engineering consultants to prepare a negative environmental impact report, site grading, drainage, and soil study.
  • Provide statistical power consumption and peak power analysis of present and future electrical demand loads.
  • Provide a set of electrical plans, including single line diagrams, main service switchgear, and power demand calculations.
  • Conduct an energy audit.
  • Provide detailed data about site topology and present and future land use.
  • If applicable, provide data regarding local climatic conditions, such as wind, sand, or dust accumulation conditions, and cyclic flooding conditions.
  • For roof mount systems, provide aerial photographs of roof plans that show mechanical equipment, air vents, and roof hatches. Drawings must also accompany architectural drawings that show parapet heights and objects that could cause shading.
  • Specifications should outline current electrical tariff agreements.
  • The document should also incorporate any and all special covenants, conditions, and restrictions associated with the leased property.
  • To ensure system hardware reliability for the extent of the contract, the RFP must include a generic outline of hardware and data acquisition and monitoring software requirements.
  • The specifications must request the provider to disclose all issues that may cause noncompliance.
  • Expected power output performance guarantees, as well as projected annual power generation requirements, must be delineated Owners are also advised to conduct preliminary renewable energy production studies that would enable them to evaluate energy production potential as well as economic analysis of possible alternatives.