The Power Sales Agreement serves as the primary commercial contract in power generation projects within the United Arab Emirates, establishing the terms and conditions for the sale of electrical power from a generator to a purchaser. This document is essential for both conventional and renewable energy projects, typically used when developing new power plants or formalizing existing power supply arrangements. It must comply with UAE federal laws, including Federal Law No. 1 of 2015 and relevant emirate-level regulations (such as those from EWEC or DEWA). The agreement comprehensively addresses technical requirements, commercial terms, regulatory compliance, and risk allocation between parties, while incorporating specific UAE market practices and regulatory requirements.
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1. Parties: Identification of the power seller (generator) and buyer, including their legal status and addresses
2. Background: Context of the agreement, including facility description, relevant licenses, and purpose of the agreement
3. Definitions and Interpretation: Definitions of technical and legal terms used throughout the agreement, and rules of interpretation
4. Sale and Purchase Obligations: Core obligations regarding the sale and purchase of power, including committed capacity and energy quantities
5. Term and Effectiveness: Duration of the agreement, conditions precedent, and effectiveness dates
6. Facility Requirements: Technical and operational requirements for the power generation facility
7. Metering and Testing: Requirements for power measurement, meter testing, and verification procedures
8. Pricing and Payment: Tariff structure, calculation methods, billing procedures, and payment terms
9. Grid Connection and Delivery: Requirements for grid connection, delivery points, and transmission arrangements
10. Operating Procedures: Day-to-day operational requirements, dispatch procedures, and maintenance protocols
11. Performance Standards: Required performance levels, availability requirements, and quality standards
12. Force Majeure: Definition of force majeure events and their consequences
13. Default and Termination: Events of default, cure periods, and termination rights
14. Liability and Indemnification: Allocation of risks, limitations of liability, and indemnification obligations
15. Insurance: Required insurance coverage and related obligations
16. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law
17. Confidentiality: Protection of confidential information and permitted disclosures
18. Miscellaneous: Standard boilerplate provisions including notices, amendments, and assignments
1. Renewable Energy Certificates: Required when the facility generates renewable energy and needs to address green certificates or credits
2. Construction and Development: Included when the facility is not yet operational, covering construction milestones and requirements
3. Fuel Supply: Required for thermal power plants to address fuel procurement and quality requirements
4. Environmental Credits: Used when carbon credits or other environmental attributes are relevant
5. Government Support: Included when government guarantees or support mechanisms are part of the project structure
6. Local Content Requirements: Required when specific UAE local content obligations apply to the project
7. Decommissioning: Included for projects requiring specific end-of-term facility decommissioning provisions
8. Islamic Finance Provisions: Required when the project involves Sharia-compliant financing
1. Technical Specifications: Detailed technical parameters of the facility including capacity, technology, and performance requirements
2. Testing Procedures: Detailed procedures for testing facility performance and output
3. Tariff and Payment Calculations: Detailed formulas and examples for calculating payments
4. Operating Procedures Manual: Detailed procedures for day-to-day operation and maintenance
5. Grid Connection Requirements: Technical requirements for connection to the power grid
6. Performance Security Forms: Forms of required performance bonds or guarantees
7. Metering Specifications: Technical requirements for metering equipment and procedures
8. Insurance Requirements: Detailed specification of required insurance coverage
9. Form of Direct Agreement: Standard form of direct agreement with lenders
10. Environmental and Social Requirements: Detailed environmental and social compliance requirements
11. Dispatch Procedures: Detailed procedures for power dispatch and scheduling
12. Site Description: Legal description and drawings of the facility site
Authors
Relevant legal definitions
Clauses
Relevant Industries
Energy & Utilities
Power Generation
Renewable Energy
Infrastructure
Industrial & Manufacturing
Oil & Gas
Construction
Environmental Services
Public Utilities
Project Finance
Relevant Teams
Legal
Commercial
Operations
Regulatory Affairs
Business Development
Project Management
Technical Operations
Risk Management
Environmental Compliance
Finance
Grid Operations
Contract Administration
Relevant Roles
Chief Executive Officer
Commercial Director
Project Director
Legal Counsel
Power Plant Manager
Energy Trading Manager
Regulatory Compliance Officer
Technical Operations Manager
Contract Manager
Business Development Director
Risk Manager
Environmental Compliance Manager
Finance Director
Grid Connection Manager
Power Purchase Agreement Manager
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