ARTICLE
28 October 2012

EPC Contracts In the Australian Renewable Energy Sector – Wind Farms, part 7

Part 7 continues example clauses for use in an EPC contract for a wind farm in the Australian renewable energy sector.
Australia Energy and Natural Resources
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  1. Subject to the provisions of this GC [ ], the Contractor is entitled to an extension of time to the Date for Commercial Operation as the Project Company assesses, where a delay to the progress of the Works is caused by any of the following events, whether occurring before, on or after the Date for Commercial Operation:
    1. any act, omission, breach or default by the Project Company, the Project Company?s Representative and their agents, employees and contractors;
    2. a Variation, except where that Variation is caused by an act, omission or default of the Contractor or its Subcontractors, agents or employees;
    3. a suspension of the Works pursuant to GC [ ], except where that suspension is caused by an act, omission or default of the Contractor or its Subcontractors, agents or employees;
    4. an Event of Force Majeure; or
    5. a Change of Law.
  1. Despite any other provisions of this GC [ ], the Project Company may at any time make a fair and reasonable extension of the Date for Commercial Operation.
  2. The Contractor must constantly use its best endeavours to avoid delay in the progress of the works.
  3. If the Contractor fails to submit the notices required under GCs [ ].1, [ ].2 and [ ].3 within the times required then:
    1. the Contractor has no entitlement to an extension of time;
    2. the Contractor must comply with the requirements to perform the Works by the Date for Commercial Operation; and
    3. any principle of law or equity (including those which might otherwise entitle the Contractor to relief and the "prevention principle") which might otherwise render the Date for Commercial Operation immeasurable and liquidated damages unenforceable, will not apply.
  1. It is a further condition precedent of the Contractor?s entitlement to an extension of time that the critical path noted on the Program is affected in a manner which might reasonably be expected to result in a delay to the Works reaching Commercial Operation by the Date for Commercial Operation.
  2. If there are two or more concurrent causes of delay and at least one of those delays would not entitle the Contractor to an extension of time under this GC [ ] then, to the extent of that concurrency, the Contractor is not entitled to an extension of time.
  3. The Project Company may direct the Contractor?s Representative to accelerate the Works for any reason including as an alternative to granting an extension of time to the Date for Commercial Operation.
  4. The Contractor will be entitled to all extra costs necessarily incurred, by the Contractor in complying with an acceleration direction under GC [ ].11, except where the direction was issued as a consequence of the failure of the Contractor to fulfil its obligations under this Contract. The Project Company must assess and decide as soon as reasonably practical, the extra costs necessarily incurred by the Contractor.

Part III - Grid Access Regime

  1. The Contractor must co-ordinate the connection of the Facility to the Transmission Line and provide, in a timely manner, suitable termination facilities in accordance with Appendix 1. The Contractor must liaise with the Network Service Provider, Government Authorities and other parties to avoid delays in connecting the Facility to the Transmission Line.
  2. On the Date for First Synchronisation the Project Company must ensure that there is in place a Transmission Network which is capable of receiving the generated output the Facility is physically capable of producing at any given time.
  3. The Project Company?s obligation to ensure that the Transmission Network is in place is subject to the Contractor being able (physically and legally) to connect the Facility to the Transmission Line and import and/or export power to the Transmission Network.
  4. If the Contractor notifies the Project Company that First Synchronisation is likely to take place before the Date for First Synchronisation, the Project Company must endeavour, but is under no obligation to ensure that the Transmission Network is in place, to enable First Synchronisation to take place in accordance with the Contractor?s revised estimate of First Synchronisation.
  5. At the time of and following First Synchronisation the Project Company will ensure that the Contractor is permitted to export to the Transmission Network power which the Facility is physically capable of exporting, provided that:
    1. it is necessary for the Contractor to export that amount of power if the Contractor is to obtain Commercial Operation;
    2. the Contractor has complied in all respects with its obligations under GC [ ].7; and
    3. in the reasonable opinion of the Project Company and/or the Network Service Provider the export of power by the Facility will not pose a threat to the safety of persons and/or property (including the Transmission Network).
  1. For the avoidance of doubt, the Project Company 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 Network in accordance with the Grid Code.
  2. The Contractor must carry out the testing of the Works, in particular in relation to the connection of the Facility to the Transmission Network so as to ensure that the Project Company and the Contractor as a Participant (as defined in the Electricity Code) comply with their obligations under the Electricity Code in respect of the Testing of the Works,
  3. The Contractor must carry out the Testing of the Works, in particular in relation to the connection of the Facility to the Transmission Network, so as to ensure that:
    1. any interference to the Transmission Network is minimised; and
    2. damage to the Transmission Network is avoided.
  1. The Contractor must promptly report to the Project Company?s Representative any interference with and damage to the Transmission Network which connects with the Facility.
  2. Without derogating from the Contractor?s obligations under this Contract, in carrying out any test which requires the Contractor to supply electricity to the Transmission Network, the Contractor must:
    1. issue a notice to the Project Company?s Representative at least 24 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;
    2. promptly notify the Project Company?s Representative if there is any change in the information contained in such notice; and
    3. do all things necessary to assist the Project Company (including but not limited to cooperating with the Network Service Provider and complying with its obligations under GC 20.15), so that the Project Company can comply with its obligations under the National Electricity Code.

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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.


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