Offshore Wind Worldwide 2022 edition - Flipbook - Page 112
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III. Offtake issues
A. Offtake, remuneration
and tariff scheme
While the template of the PPA for offshore
wind has not been released and India is at
this stage still in the process of tendering the
first project of this nature, note that PPAs
would typically be long-term tie ups for
supply of power, and power producers would
be able to recover a tariff for the supplied
power based on the tariff determined
through the ICB process. In the event of
shortfall in offtake, there would generally be
a scheme for generation compensation in the
PPAs. However, this would be subject to
certain exclusions such as grid security,
equipment and personnel safety etc.
B. Consequences of a project delay
While the template of the PPA for offshore
wind has not been released and India is at
this stage still in the process of tendering the
first project of this nature, generally, PPAs
executed with government offtakers (such as
agencies of the Government or Government
Hogan Lovells
India
distribution utilities) provide for a levy of
liquidated damages on the developer in case
of project commissioning delays, except for
delays caused by offtaker-default or force
majeure conditions. Liquidated damages
would also be levied in case certain
conditions/milestones are not met as per the
timelines prescribed in the PPA.
The offtaker would have the right to invoke
the performance security furnished by the
developer to the offtaker under the PPA to
realise any liquidated damages. If delay
persists beyond a certain timeframe specified
in the PPA, the offtaker can terminate the
agreement.
C.Examples of actual
and future tariffs
As indicated above, the Offshore Wind Policy
contemplates tariff determination pursuant
to bid process and in terms of Section 63 of
the Electricity Act, the tariff discovered
through transparent and competitive bid
would be applicable for the relevant project.