Legal Aspects of Clean Energy ProjectsClean Energy Project Analysis Course

Biomass Fired Power Plant, USA

Photo Credit: Andrew Carlin, Tracy Operators/NREL PIX

Objectives

Raise awareness of legal issues around clean energy projects

Outline key legal documents that are used in clean energy projects

Introduce participants to the RETScreen Legal Documents Toolkit

Legal Barriers

There are significant legal barriers to clean energy projects

Legal documents for a clean energy project must be: Appropriate Comprehensive Customized

Costs on an average project can range from tens to hundreds of thousands to millions of dollars

Risk

Legal aspects of a clean energy project are fundamentally about identifying, managing, and mitigating risk

Shielding from liability

Photo Credit: Nordex Gmbh

600 kW Wind Turbine installation

What is RETScreen?

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35 languages covering more than 2/3rds of the world’s population

Responsible for over $4 billion in user savings to date

Provide free-of-charge by the Government of Canada

www.retscreen.net

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 over the Internet that can be used as templates, examples, or customized

Developing new documents for public use where none exist

RETScreen Legal Documents Project Led 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

firms in New York and Washington

Financially supported by a grant from the Renewable Energy and Energy Efficiency Partnership (REEEP)

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 project

Photo Credit: Nordex Gmbh

Legal Framework (continued)

Legal Environment:

Obligations vs. considerations

Jurisdiction and paramountcy

International Law

Project Legal Documentation

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 government to either perform an action or refrain from performing an action

Permitting: the formal approval process given by a level of government to allow the project developer to engage in an activity or action

Power Purchase Agreement

Fundamentally, an agreement for the purchase and sale of electricity

Perhaps the central legal document in a clean power project

Level of complexity

Energy Performance Contract

Agreement to make energy-saving capital and operational improvements to a building or industrial facility

Role of ESCOs

Results- or Performance-based contracting

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 Agreement

Environmental

Environmental Impact Assessment

Emissions Trading Agreement

Environmental Attributes Trading Agreement

Other Legal/Quasi-Legal Issues

Corporate Structure

Monitoring, Targeting & Verification

Intellectual Property

Dispute Resolution

Decommissioning

Other Legal/Quasi-Legal Issues

Labour

Indigenous Peoples & Ethnic Minorities

NIMBY Factor

Project Finance

Legal strategy + documentation = $$$Legal strategy + documentation = $$$

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 any clean energy project AND can represent a major expense

RETScreen has developed tools that will raise awareness of legal issues in clean energy projects and reduce transactional legal costs

Project developers may experience significant savings by taking advantage of the documents and tools that have been identified and developed

Disclaimer

The RETScreen Training Course 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 appropriate or 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.

Questions?

www.retscreen.netFor further information please visit the RETScreen Website at

Legal Aspects of Clean Energy Projects Module

RETScreen® International Clean Energy Project Analysis Course