WORKING AT HEIGHTS - Wind Energy Network

SPONSORS OF legal eaglesRenewable Energy Contractsa brief overviewContracts for the provision ofgoods and services leading to thecommissioning and maintenance ofa renewable energy system, be thata wind turbine, hydro turbine, solarinstallation, Biomass system, etc allneed careful consideration in terms ofcontent and structure.ProtectionThe final Overriding Contract mustprotect the consultant from risk andreflect the factual process of leadinginto and procuring the project throughfeasibility, installation, commissioningand maintenance. On the other handreasonable legal protection should beafforded to the client as regards correctduties of care for the services providedand correct warranties for the goodssupplied, thus underpinning the provisionof and performance of the system overtime. Also, the documentation presentedby the consultant should be as clear,concise and “user friendly” as possible.Typical projectTake a typical project for say, the provisionof a wind or hydro turbine to a user likea farmer. In this process, one mightreasonably expect a series of phases asfollows...Initial visit to site and initialdiscussions• Outline Services – site assessment,measurement, planning application,outline of goods and services, initialreturn on investment ideas for parties,production of a report to lead to nextphase• Detailed Service – seasonalmeasures, specialist studies, detailedspecification of goods and services,detailed performance specificationsre downtime etc, dealing with planningconditions, details of project servicesand maintenance services, cash flowplan, production of a report to lead tonext phase• Project Services – all services tolead to installation and commissioningand for utility company and networkoperator involvement and takeover• Maintenance Services – ongoingmaintenance re cost in use relative toperformance over time and avoidanceof downtime etcThe above example is fairly basic and forillustrative purposes only, but, from thisexample, it is important to appreciate thateach of these phases should give rise toa series of independent contracts workingincrementally forward on the projectand working in synchronisation with theOverriding ContractThese incremental phases need to becarefully worked through between theconsultant and the client and all need to besubject to an Overriding Contract betweenconsultant and client containing key clausesrelating to sale of goods and provision ofservices with particular care as to...• Any selection of goods or design service• Commissioning• Charges and payment, warranties asto goods supplied for the benefit of theclient and any reasonable exclusion orreduction of liability clauses for thebenefit of the consultant• Financial arrangements including FITsharing and return on investmentformula after dealing with any domesticconsumption of electricity by the client• Grant of Lease and draft Specimen Lease• Maintenance• Timing for completion of installation• Planning and other statutory requirements• Provision of information between clientand customer• Delivery and risk transfer in the goods• Confidentiality and intellectual property• Llimitation or exclusion of liability as faras legally permitted• Assignment and sub contracting• Force majeure i.e. unforeseencircumstances which may delay theproject• Possible right for client to cancelcontracts on consumer credit grounds• Other clausesMost importantly the Overriding Contractmust carefully regulate the progression ofthe above phases between the parties, byspecifically controlling when the individualcontracts for the individual phases ariseand are concluded, so the parties are freeand clear to deal, if they both wish to, andmove onto the next phase.Similarities to construction andengineering contractsRenewable Energy Contracts are to alarge degree similar to construction andengineering contracts in that properlydrafted they should control the risk relativeto the best outcome in time, quality andmoney. However, of major difference isthe lead in and project planning phaseswhich are rarely allowed for contractorsto participate in (apart from quicklycoming up with cost saving ideas andvalue engineering etc) on mainstreamcontracting and engineering projects.One major similarity does exist betweenmainstream contracting and engineeringprojects and Renewables Projects. Inthat the more timely, quality and detailedthe information, worked up at the outset,relative to a detailed scope of services andgoods for a clearly related price, the fewerclaims, the fewer misunderstandings andthe better the job.Denison Till have many years experiencein drafting traditional engineering andconstruction contracts and have beeninvolved in drafting and negotiatingan increasing number of renewablescontracts for wind turbines, hydro turbinesand solar power installations.Gareth Hevey, Denison Tillwww.denisontill.com80www.windenergynetwork.co.uk