Solar PV Facility Project Financing & Contracting
Connection agreement
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Connection agreement
The Connection Agreement is designed for
use when contracting for the connection
of the Facility generation equipment
into the relevant electricity transmission
or distribution network (Network)
with either a transmission company, a
distribution company (for embedded
generators), an electrical utility or a small
grid owner/operator. The contract will
generally govern both the construction
and installation of the connection assets,
and the long-term provision of services.
As both transmission and distribution
networks are run by large-scale utilities
with monopolistic control over their
respective networks, there is limited
scope for negotiation of the individual
connection agreements. Each Network
Services Provider typically contracts for
connection using an internal Standard
Form Agreement, rather than on an
individual project basis.
There is no uniform version of a Connection
Agreement. Consequently, the precedent
Connection Agreement provided as an
example should be taken as a reference
point for the types of obligations that form
part of a typical Transmission Network
Connection Agreement. It has been
written as a customer-oriented agreement,
and the developer's actual obligations may
be more onerous.
If the connection is to be a captive facility
for a single off-taker, such as a small grid
owner/operator, the obligations can be
incorporated into other agreements.
In particular, the construction of the
connection assets can be included in
the EPC contracts, and maintenance
obligations in the O&M contract.
Additionally, the primary obligations for
Metering will likely be governed by this
agreement (or an ancillary agreement
between the Customer and the Network
Services Provider). Care should be taken to
ensure consistency between the Metering
obligations under the Connection
Agreement, the EPC Contract,
the O&M Contract, and the PPA.
Simplified sequence of events
Owner identifies need to delivery electricity through the Electricity
Network once the Solar PV Facility is in operation.
Owner identifies requirements of connection to Transmission
Network, Distribution Network, or Single Off-taker
(where "Captive").
Negotiation of term of Connection Agreement
Usually for same term as PPA
•
May be renewals
Negotiation of construction, services, and metering
where appropriate, in accordance with the National
Electricity Rules
.
Chapter 5: Governs the connection process
for most generators
Chapter 6/6A: Governs the negotiation framework
in respect of negotiated services
Interaction with Other Contract
.
Construction of Connection and Testing obligations
will interact with EPC Contract
Ongoing services, maintenance and outages provisions
will interact with O&M Contract
Outages and maintenance clauses will affect delivery
of electricity under the PPA
Sign contract
Reject offer of Network
Services Provider
Recommence process
Connection Agreement binding from Commencement
Date (subject to conditions precedent)View entire presentation