Australia: Epc Contracts In The Renewable Energy Sector - South African Re Ipp Programme - Lessons Learned From Phases 1 And 2 (October 2012) Part 9

Last Updated: 27 October 2012

No breach

3.7 The Owner will not be in breach of any obligation under this Contract by reason only of the Contractor being denied permission to export power to the Transmission System and/or Distribution System in accordance with the Codes for reasons attributable directly or indirectly to the Contractor and/or the performance of the Facility as a whole.

No deemed Commercial Operation

3.8 The Contractor acknowledges that there will not be any deemed Commercial Operation as a result of the connection of the Facility to the Transmission System or the sale of any electricity.

Code requirements

3.9 The Contractor must perform the Works (including the Connection Works) to ensure that the Owner and Contractor [its Personnel and Subcontractors] each comply with the requirements of any Responsible Authorities and each Party's obligations under the:

3.9.1 Codes;

3.9.2 applicable Laws; and

3.9.3 Project Documents.

Avoidance of Damage or Interference to Transmission System

3.10 The Contractor must perform the Works (including the Connection Works) to ensure that:

3.10.1 any interference to the Transmission System and/or Distribution System is minimised; and

3.10.2 damage to the Transmission System and/or Distribution System is avoided.

Reporting of interference

3.11 The Contractor must immediately report to the Owner's Representative any interference with and damage to the Transmission System and/or Distribution System which connects with the Facility of which it is aware.

Additional obligations

3.12 In performing any test which requires the Contractor to supply electricity to the Transmission System and/or Distribution System, the Contractor must:

3.12.1 on behalf of the Owner, comply with the Owner's obligations under clause 2 of the Transmission Agreement and/or clause 12 of the Distribution Agreement as they relate connection and synchronisation of the Facility with the Transmission System and/or Distribution System;

[Note: This is a pass-through of clause 2 of the Transmission Agreement and clause 12 of the Distribution Agreement]

3.12.2 issue a notice to the Owner's Representative at least 48 hours prior to the time at which it wishes to so supply, detailing the testing or commissioning and including the Contractor's best estimate of the total period and quantity (in MWh per half-hour) of that supply;

3.12.3 promptly notify the Owner's Representative if there is any material change in the information contained in such notice; and

3.12.4 do all things reasonably necessary to assist the Owner (including co-operating with the NTC and complying with its 'Code Requirements' obligations).

APPENDIX 2

Sample schedules - solar PV projects - RE IPP Programme

TESTING

[Drafting Note: The testing structure proposed below follows the distinction between the period prior to the Commercial Operating Date (the "Pre-COD Period") and the period after the Commercial Operating Date (the "Post-COD Period"), with the Commercial Operating Date being the date so defined in the Power Purchase Agreement.

The Pre-COD Period testing will involve Precommissioning Tests, Commissioning Tests and Performance Tests. The Post-COD Period testing will involve Performance Testing.

A complete testing of a photovoltaic facility requires the facility to be grid-connected. It is therefore important to continue the testing following the Commercial Operating Date.]

1 PRE-COD PERIOD TESTING

1.1 Precommissioning Tests

[List details of tests to be passed prior to commissioning in the table below or incorporate by reference tests set out in Specification (Schedule 1) if applicable.

Please note that all tests conducted as Precommissioning Tests will have to be conducted without grid connection.

The below headings are an indication of the nature of the tests that you ought to include. This is not a complete list.

Please confirm with your technical advisor whether any specific testing activity requires grid connection to be in place.

The Precommissioning Tests ought to include any requirements under the applicable grid code or other legal requirement prior to the grid connection.]

1.1.1 General Testing Activities

The Works have been performed in compliance with the Specification and any subsequent Variation and all further items set out in GC 5.1.

The as-built drawings are an exact representation of the Works.

The Works have been performed in a workmanlike manner and are in compliance with all requirements stipulated or referred to in GC 5.1.

1.1.2 Mechanical Testing Activities

The proper mechanical construction and functioning of the Facility shall be tested, including but not limited to the testing of the:

  1. Correct supply and positioning of all civil infrastructure with reference to the Specification (including but not limited to the CCTV, security system and telecom system).
  2. Proper mounting of the modules, the verification of their quantity and consistency with the Specification (including but not limited to the type of technology, shading effects, absence of damages and the proper application of the mismatching procedure).
  3. Absence of major visual defects in the Works or the component parts.
  4. Absence of fractures, irregularity, or damage on external surface of the component parts.
  5. Absence of fractures, irregularity, or damage within the component parts, including but not limited to the cells composing the modules.
  6. Absence of loss of mechanical integrity of any of the component parts, including but not limited to the modules.
  7. If required, obtaining any static approval for the structure and foundations, to be performed by a properly qualified and independent engineer to be chosen by the Owner.

1.1.3 Electrical Testing Activities

The proper electrical construction and functioning of the Facility shall be tested, to the extent possible without the Facility being connected to the Distribution System or Transmission System, including but not limited to the testing of the:

  1. Correct supply and positioning of all electrical infrastructure with reference to the Specification.
  2. Proper connection of the cables, including but not limited to the proper clamping of terminal blocks.
  3. Insulation resistance of conductors on DC side (test voltage = [?]).
  4. Insulation resistance of conductors on low voltage AC side (test voltage = [?]).
  5. Insulation resistance and applied voltage tests of conductors on medium voltage AC side.
  6. Off-line test and electrical test on transformer, including:
  7. Off-line Testing Procedure - General Verification

    1. Verifying mechanical works completion.
    2. Verifying proper positioning and clamping of transformer, according to technical documentation.
    3. Verifying terminal connection on MV and LV side and cabling of cables.
    4. Verifying transformer ground connection.
    5. Verifying data on nameplate.
    6. Verifying absence of condensation and oxidation on terminal strips.
    7. Verifying screw tightness.
    8. Verifying proper functioning of accessories.
    9. Verifying proper positioning and cabling of temperature probes.
    10. Verifying and setting temperature tripping thresholds.

    In case of oil insulated transformer, the following verifications shall be undertaken:

    1. Oil dielectric measurement and gas analysis.
    1. Check of tank grounding connection.
    2. Oil level check (oil conservator).
    3. Check of thermometer pocket oil level.
    1. Electrical test (factory testing in presence of the Owner)
    1. Measurement of winding insulation resistance to ground:
    2. Measurement of voltage ratio.
  1. Electrical grounding of Surge Protection Devices (SPD).
  2. Electrical grounding of electrical boxes.
  3. Proper functioning of mechanical interlocks in MV boxes.
  4. Correct labelling of all electrical infrastructure, including but not limited to the inverters, probes and electrical boxes, in relation to the Specification and as-built drawings.
  5. Electrical continuity between the parts of the electrical infrastructure where electrical continuity is required, including but not limited to: between modules, between the modules and the inverters, and between the inverters and the transformers.
  6. The proper electrical characteristics of the Facility, including but not limited string open circuit voltage, string short circuit current, and the direct current, each in accordance with given testing conditions, a target measurement uncertainty and in accordance with applicable international standards.

1.1.4 Monitoring & Security System Testing Activities

Correct supply and positioning of all the monitoring systems and security systems (including but not limited to any microwave detectors and the CCTV) with reference to the Specification.

  1. Proper connections of the cables in the monitoring systems and security systems, including but not limited to the proper clamping of terminal blocks.
  2. Electrical continuity of the appropriate parts of the monitoring and security system components.
  3. Proper functioning of all aspects of the monitoring system and security system, including but not limited to proper functioning of the alarms and proper off-site data transmission.]

[List details of tests to be passed prior to commissioning in the table below or incorporate by reference tests set out in Specification (Schedule 1) if applicable]

Description of Precommission tests Required resul
In the presence of our representative, you must carry out the tests set out in [insert reference to relevant specification or applicable industry standard (including title, author and revision date)] on each [insert description of relevant part of the Works or the Facility]. 100% of the [insert description of relevant part of the Works or the Facility] must achieve 100% compliance with [insert reference to relevant specification or applicable industry standard (including title, author and revision date)].
[insert] test [insert]

1.2 Commissioning Tests

[List details of tests to be passed in the table below or incorporate by reference tests set out in Specification (Schedule 1) if applicable.

The below headings are an indication of the nature of the tests that you ought to include. This is not a complete list.

Please confirm with your technical advisor whether any specific testing activity does not require grid connection to be in place and could, accordingly, be conducted as part of the Precommissioning Tests.

The Commissioning Tests typically include a range of tests required by the grid operator under the relevant grid code and are therefore highly country-specific.

The Commissioning Tests will include all those tests required to be conducted while the Facility is connected to the Distribution Network or the Transmission Network and that will be necessary prior to the Performance Tests being carried out.

The Commissioning Tests ought to include any requirements under the applicable grid code or other legal requirement prior to achieve operating grid connection.]

1.2.1 On-Line Tests

The following tests could be included in the Commissioning Tests:

  1. The proper operation of the inverters, with reference to the maintenance manual and the data sheet, and the verification of the correct operation of the maximum power point tracking device (MPPT).
  2. The proper "stop and start" functionality of inverters.
  3. That the protection devices trip when the appropriate thresholds are met.
  4. The proper operation of the data monitoring system.
  5. The proper operation of the Facility in various operating condition, including but not limited to Power ON, Power OFF, and Grid disconnected.
  6. The proper functioning of the MV/LV transformers.

1.2.2 Tests pursuant to regulatory requirements and grid code

[Any tests that might be required under regulatory regimes or the grid code.]

Description of Commissioning Tests Required result
[insert] test [insert]

1.3 Performance Test

[Drafting Note: Please note that the Owner might choose to trigger an Early Operating Period pursuant to clause 4.4 of the Power Purchase Agreement.]

1.3.1 Achieved Capacity Test

[As a pre-condition to the Facility achieving the Commercial Operating Date under the Power Purchase Agreement, the Independent Engineer will need to certify the Achieved Capacity. If the Achieved Capacity falls short of the Contracted Capacity, such Achieved Capacity might substitute the Contracted Capacity. The Achieved Capacity is also not allowed to exceed the Contracted Capacity.

The Power Purchase Agreement does not stipulate the methodology by which the Achieved Capacity is measured and Briefing Note 13 of the DoE has only partially shed light on this issue. We would therefore expect the Independent Engineer Agreement to stipulate a detailed methodology for determining the Achieved Capacity.

In line with other projects already banked, we are proposing tha t the Achieved Capacity will be confirmed as part of the Tests, but that no specific guarantee in Schedule 9 attaches to the Contracted Capacity not being met. The consequences would therefore be the same as for any other incident of not meeting the Specification.]

1.3.2 Commercial Operation Performance Test

The Contractor shall measure and calculate the Actual PR in accordance with Attachment A of Schedule 8 under the following testing conditions:

  1. Subject to an extension pursuant to paragraph (d), the Evaluation Period shall be [5] days.
  2. Subject to paragraph (c), the results of all Measurement Periods in a day are admissible, if during that day there were at least [12] Measurement Periods during which the average unshaded insolation in the plane of array was at least 400 W/m² ("Admissible Measurements").
  3. The results of a Measurement Period shall be inadmissible if the Facility is not fully available.
  4. If there are not at least [12] Admissible Measurements for a day, the given day shall be disregarded and the Evaluation Period shall be extended by a day. Such extension of time shall be limited to a maximum of [5] days.
  5. If despite this extension, there are not at least [12] Admissible Measurements not met, then at the Owner's sole discretion:
    1. the Commercial Operation Performance Test shall be deemed completed despite the lower number of admissible Measurement Periods and the Actual PR shall be calculated on the basis of the Admissible Measurements; or
    2. the threshold of the average unshaded insolation in the plane of array shall be reduced to 300 W/m² so as to increase the number of Admissible Measurements. If, despite such reduction, the increased number of Admissible Measurements does not reach or exceed the minimum of [12] Admissible Measurements, then the Commercial Operation Performance Test shall be deemed completed and the Actual PR shall be calculated on the basis of, at the Owner's sole discretion (x) on the Admissible Measurements (as defined originally) or (y) on the Admissible Measurements following the reduction of the required insolation pursuant to the present paragraph.
    3. For the avoidance of doubt:
      • the extension to the Commercial Operation Performance Test due to unavailability of the Facility is uncapped; and
      • if low insolation conditions coincide with incidents of unavailability of the Facility, the relevant measurements shall be deemed inadmissible entirely and solely due to the unavailability of the Facility.

1.3.3 DC Capacity Test

The Contractor shall calculate the sum total of the nameplate values of the rated power of the PV modules actually installed (the "Installed DC Capacity"). The "Guaranteed DC Capacity" shall be [XXX] MWpeak.

2 POST-COD PERFORMANCE TESTING

2.1 Operation Performance Test

The Contractor shall measure and calculate the Actual PR in accordance with Attachment A of Schedule 8 for the following Evaluation Periods:

2.1.1 the first Evaluation Period running from the day after the Commercial Operation Date to the first anniversary of the Commercial Operation Date;

2.1.2 the second Evaluation Period running from the day after the first anniversary of the Commercial Operation Date to the second anniversary of the Commercial Operation Date; and

2.1.3 the third Evaluation Period running from the day after the second anniversary of the Commercial Operation Date to the end of the Defects Liability Period.

The "Guaranteed PR" shall be [81.00 %].

Attachment A to Testing Schedule - Measurement of Actual Performance Ratio]

1 Actual performance ratio

1.1 Calculation of the Actual Performance Ratio

The Actual Performance Ratio (the "Actual PR") for the relevant Evaluation Period ("EP") shall be calculated as the insolation-weighted average of each Measured PRMP for each Measurement Period falling with the Evaluation Period as follows:

whereby:

Actual PREP is the insolation-weighted average (dimensionless) of Measured PRMP for all relevant Measurement Periods in the Evaluation Period;

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.


DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to www.dlapiper.com

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