What Is Turbine Supply Agreement

The issues addressed by the parties in the turbine supply and balance sheet agreements include the scope of work, payment terms, completion measures, warranty obligations and limitations of liability (in particular with respect to the turbine supplier`s liability and the balance of the facility`s manufacturer`s liability for non-performance of its obligations on certain key dates related to the turbine supplier`s power purchase obligations. promoter). These issues are discussed below. Project developers can also perform partial repowering, which allows existing wind projects to be upgraded with equipment that increases power generation, reduces machine loads, increases grid maintenance capabilities, and improves project reliability. A partial Repower project involves the integration of new parts and improved equipment into the existing project infrastructure. In many cases, a turbine supplier has developed a retrofit kit for existing turbines to improve the capacity and efficiency of existing equipment. These changes typically take the form of installing new blades, rotors, drive shafts and control systems while reusing the existing tower and foundations. With the increase in the capacity of the re-engined turbines, the developer may also be asked to upgrade the existing electrical system and the composite substation. Integrating existing infrastructure with new devices can present a number of challenges. First, existing infrastructure, including towers and foundations, must have sufficient structural integrity to support the load profile of new turbines. If the wind regime at the project site is aggressive, the load on the existing foundation may have reduced the structural integrity of the foundation, making the existing foundation unsuitable for repowering without costly renovation. A second consideration is to obtain adequate warranty protection. Although new turbines and upgraded electrical equipment are usually covered by a manufacturer`s warranty, the protection provided by the warranty may be compromised if the damage to the covered equipment is caused by a failure of the original equipment or infrastructure.

This results in increased risk for project developers. While repowering may seem like a more cost-effective way to extend the life of a proven wind resource, the performance risks associated with integrating new equipment into older infrastructure can be challenging. When determining the duration of your ADM, the original equipment manufacturer (“OEM”) often pushes for long-term service agreements. But is it the right solution for your wind farm project? Is a full service contract required after TSA warranties expire? How do you want to operate your wind farm throughout its lifetime? Your ADM must not only support your specific project business case, but also adapt to the long-term portfolio strategy, and it is of paramount importance to get the right options in SMA. . For example, the inclusion of an exit fee option or explicit options for limited-scope services that maintain contractual flexibility compared to future optimization. Engineering, procurement and construction tasks are often combined into a single agreement (an “EPC Agreement”). Separate agreements may provide or provide for other services, such as. B warranty services or operation and maintenance services for the completed installation.

D. Insurance and compensation issues. A project promoter should receive appropriate compensation and insurance cover from the various parties with whom it concludes contracts, including the turbine supplier and the residual plant builder, and require those parties to receive similar protection from their subcontractors and material suppliers in favour of the project promoter. The relevant compensation may include general compensation for bodily injury, death and property damage resulting from the activities of the beneficiary of the compensation; indemnification of the contractor against the subcontractor`s privileges; compensation for taxes (not the responsibility of the promoter); compensation for violations of applicable law; and compensation for claims of intellectual property infringement. Appropriate insurance policies may include general liability, workers` compensation and employer liability, auto, defects and omissions (for design and engineering services), and overall builder risk (property insurance for the project). Such policies should, where permitted, designate the promoter and its funder as additional insureds and include appropriate derogations from subrogation. The limitations of the corresponding policy vary in terms of the type of work performed and the scope of the project. A project proponent should consult with an insurance or risk management specialist to ensure that appropriate types and ratios of coverage are met. [1] Also known as SAA (Service Availability Agreement) or SWA (Service Warranty Agreement): According to the U.S. Department of Energy`s (“DOE”) National Offshore Wind Strategy Report, offshore wind represents a significant opportunity to increase domestic renewable energy capacity. According to DOE estimates, offshore wind has the potential to produce 7,200 terawatt hours of electricity per year.

As the offshore wind market continues to mature, the expansion will create new opportunities for wind turbine sellers and shipbuilding contractors. .

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