Legal Aspects of Clean Energy Projects Clean Energy Project Analysis Course Photo Credit: Andrew Carlin, Tracy Operators/NREL PIX Biomass Fired Power Plant, USA
Dec 19, 2015
Legal Aspects of Clean Energy ProjectsClean Energy Project Analysis Course
Photo Credit: Andrew Carlin, Tracy Operators/NREL PIX
Biomass Fired Power Plant, USA
Objectives
Raise awareness of legal issuesaround clean energy projects
Outline key legal documents that are used in clean energy projects
Introduce participants to the RETScreen Legal Documents Toolkit
Legal Barriers
Legal documents for a clean energy project must be: Appropriate Comprehensive Customized
Costs on an average project can range from tensto hundreds of thousands to millions of dollars
Risk
Legal aspects of a clean energyproject are fundamentally about identifying, managing,and mitigating risk
Shielding from liabilityPhoto Credit: Nordex Gmbh
600 kW Wind Turbine installation
What is RETScreen?
World’s preeminent clean energy decision-making software
35 languages covering more than 2/3rds of the world’s population
More than 186,000 users in 222 countries
Provided free-of-charge by the Government of Canada
RETScreen Legal Documents Project
In keeping with RETScreen’s objective of reducing the transactional costs/barriers to clean energy projects,the Project Goal is to help reduce legal barriers by:
Making the legal requirements of a clean energy project more accessible
Bringing together sample legal documents freely available overthe Internet that can be used as templates, examples, or customized
Developing new documents for public use where none exist
Project Partners
Lead by RETScreen International/CanmetENERGY/Natural Resources Canada (NRCan)/Government of Canada
Partnership with Energy + Environment Foundation With pro bono contribution of content by lawyers from leading
firmsin New York and Washington
Financially supported by a grant from the Renewable Energy and Energy Efficiency Partnership (REEEP)
Energy + Environment Foundation
Strengthen energy and environmental education in developing countries
Promote renewable energy
Build capacity to solve energy and environmental challenges
RETScreen Legal Documents Toolkit
Legal Aspects Web Portals (at www.retscreen.net and www.energyenvironmentfoundation.org)
Also available within the RETScreen User Manual (in V4 of the software)
e-Textbook Chapter and Training Slides
Legal Discussion Forum through Energy + Environment Foundation website
Importance of Legal Counsel
Complexity of energy-related legal agreements
Highly dynamic nature of clean energy law
Differing interests/power imbalances
Transfer of risk
Legal Framework
Role in project
Type of project
Scale of project
Timing of projectPhoto Credit: Nordex Gmbh
Legal Framework (continued)
Legal Environment:
Obligations vs. considerations
Jurisdiction and paramountcy
International Law
Real Property
Broad category of documents related to the physical land and/or facilities that will be involved in the project
Green Lease
Regulatory and Permitting
Regulatory issues: obligations to a level of governmentto either perform an action or refrain from performingan action
Permitting: the formal approval process given by a levelof government to allow the project developer to engagein an activity or action
Power Purchase Agreement
Fundamentally, an agreement for the purchaseand sale of electricity
Perhaps the central legal document in a cleanpower project
Level of complexity
Energy Performance Contract
Agreement to make energy-saving capital and operational improvements to a building or industrial facility
Normally financed through the cost savings resultingfrom improved energy performance
Role of ESCOs
Design, Engineering, Procurement, Fuel Supply, Construction, O&M
Broad suite of documents to build and run the project
BOT and BOOT
Fuel Supply
Tendering
Interconnection Agreement
Secures a right to feed generated electricity into the grid
Often integrated into PPA
Transmission AgreementPhoto : SNC-Lavalin
Environmental
Environmental Impact Assessment
Emissions Trading Agreement ERPA
Environmental Attributes Trading Agreement
Other Legal/Quasi-Legal Issues
Corporate Structure
Monitoring, Targeting & Verification
Intellectual Property
Dispute Resolution
Other Legal/Quasi-Legal Issues
Decommissioning
Labour
Indigenous Peoples & Ethnic Minorities
NIMBY Factor
Project Finance
Legal strategy + documentation = $$$
Equity Financing
Debt Financing
Public-Private Partnership
Government-Linked Financing
Financial Incentives Tax incentives Net-metering
Legislated Incentives RPS/EEPS Feed-in Tariff Photo Credit: Strong, Steven DOE/NREL
Typical Financial Documentation
Overall purpose is to…
Provide incentive to the lenders to advance monies; AND
Provide security to lender for monies advanced
SECURITY is key as is management of risk
e-Textbook Chapter & Slides
See e-TextbookClean Energy Project Analysis:
RETScreen® Engineering and Cases
Legal Aspects of Clean Energy Projects Chapter
Conclusions
Legal issues and documents are an important part of anyclean energy project AND can represent a major expense
RETScreen has developed tools that will raise awarenessof legal issues in clean energy projects and reduce transactional legal costs
Project developers may experience significant savingsby taking advantage of the documents and tools thathave been identified and developed
Disclaimer
The RETScreen Training Course (i.e. presentation slides, e-Textbook chapters, linked documents, etc.)is provided for informational purposes only and does not necessarily reflect the views of the Government of Canada nor constitute an endorsement of any commercial product or person. Neither Canada nor its ministers, officers, employees or agents make any warranty in respect to this Training Course or assumes any liability arising out of the use of this Training Course.
The documents linked to herein are examples of documents available through a free and public Internet search. They are provided to the public as information resources only. No warranty, express or implied,is made by the Government of Canada, Natural Resources Canada, CanmetENERGY, RETScreen International (collectively "Natural Resources Canada") or any of its employees or consultants with regards to any aspect of the documents, including but not limited to their proprietary or intellectual property status. Natural Resources Canada does not accept any responsibility or liability for loss or damage through unauthorized use or misuse of the documents, or through lack of appropriateor sufficient due diligence. The legal documentation linked to:
is not necessarily comprehensive, complete, accurate, or up-to-date; is linked to external sites over which Natural Resources Canada has no control and for which Natural
Resources Canada assumes no responsibility; and does not constitute professional or legal advice. If you require specific legal advice,
you should always consult a qualified professional.