N.S. Battens Down Marine Renewable Energy Power Purchase Agreement (PPA)

Tidal developers considering responding to the FORCE Berth D procurement now have a clearer view of just what the successful proponent will get. On January 30, 2020, the N.S. Utility and Review Board (UARB) approved the form of the Standard Form Power Purchase Agreement (PPA) for Nova Scotia Power Incorporated’s (NSPI) purchase of marine renewable energy from Independent Power Producers in the competitive procurement process for Fundy Ocean Research Centre for Energy (FORCE) Berth D.

Marine Renewable Energy Regime. In January 2014, the N.S. government amended the N.S. Renewable Electricity Regulations, clarifying the process by which commercial scale tidal energy project developers can qualify for feed-in tariff approval and a PPA under those Regulations.

Standard Form PPA. The form of PPA the UARB approved on January 30, 2020 is specific to the current procurement for FORCE Berth D, but is very similar to the form of PPA for Developmental Tidal Feed-In Tariff (FIT) projects the UARB approved in May 2015. Key terms of the new PPA for FORCE Berth D include:

• A fixed term of 15 years from the commercial operation date.
• The project must be in-service by December 31, 2024.
• An aggregate nameplate capacity of up to 4 MW.
• An energy rate of up to $530 /MWh.
• Cumulative annual energy output of up to 13,315 MWh and cumulative energy output over the term of the PPA of up to 199,728 MWh.

The FORCE Procurement. The FORCE Berth D procurement, managed by Power Advisory LLC as Procurement Administrator, launched in December 2019. Key requirements of the procurement include:

• Refundable application deposit of $500,000.
• Removal of the prior licensee’s turbine by December 31, 2024, unless it will be incorporated into the proponent’s project.
• Abandonment security for removal of the old turbine and the proponent’s turbine of at least $4.5 million.
• Proof of adequate insurance.

According to the published procurement timeline, bidders will know by March 18, 2020 if their application has been successful.

Please contact your McInnes Cooper lawyer or any member of our Energy & Natural Resources Team @ McInnes Cooper to discuss this topic or any other legal issue.

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