Partner Rob Macredie says new template ‘shortens deal timelines, improves bankability’
DLA Piper, BusinessNZ Energy Council, and Zeale have spearheaded an energy industry initiative that recently released a free standardised template for corporate power purchase agreements (PPAs), the first of its kind publicly available in New Zealand.
“Reducing legal friction and negotiation time gives both buyers and project developers greater confidence to commit capital,” said Ben Young, BusinessNZ Energy Council policy advisor, in a news release. “That helps bring forward new renewable generation.”
In its news release, DLA Piper explained that the template serves as a balanced and neutral starting point for negotiations between developers and corporate energy users. The law firm added that the template seeks to:
Zeale – formerly known as EVA Marketplace – and its founder Paul Coster launched the energy industry initiative.
“New Zealand has a relatively small pool of large buyers,” Coster said in the news release. “Making PPAs simpler to understand and execute allows more businesses to participate in the clean energy transition.”
Zeale offers the new template and an accompanying guide on its website.
In leading the legal drafting of the template, DLA Piper’s New Zealand energy team focused on risk allocation and repeatability.
DLA Piper’s team adapted precedents from the UK’s, Europe’s, and Australia’s established PPA markets to the local regulatory and wholesale market settings.
“A well-structured template means parties do not need to rebuild contracts from first principles and can leverage experience from earlier contracts, as well as key learnings from other markets where PPAs are more prevalent,” said Rob Macredie, DLA Piper partner, in the news release. “That shortens deal timelines, improves bankability and makes transactions easier to finance.”
This past year, the team developed the template, guided by the insights from an expert working group comprising 18 organisations, including independent generators, all four gen-tailers, large corporate energy users, financiers, and public sector participants. The development also included a public consultation process.
“This fantastic initiative was led by Zeale, BusinessNZ Energy Council and DLA Piper, and provides a free resource that improves knowledge and accessibility of PPAs for large and smaller energy users,” said Karen Boyes, executive director at Major Electricity Users' Group, in a LinkedIn post.
Boyes attended the template launch.
In its news release, DLA Piper explained that large electricity users increasingly rely on corporate PPAs to ensure price certainty in the long term while underwriting the development of new renewable generation assets.
However, DLA Piper acknowledged the relative novelty of PPAs in New Zealand. According to the firm, most have required tailored documentation, tending to raise costs and hamper negotiations.
In its news release, DLA Piper shared that the initiative’s potential second phase will explore more standardised approaches. The firm noted that the working group has perceived firming and sleeving arrangements as lingering limitations.
