Turbine Supply Agreement

The developer and turbine supplier enter into a turbine supply agreement in which the project proponent agrees to acquire a number of turbines from the turbine supplier and the services provided by the turbine supplier to provide and commission turbine equipment at the project site. F. Some tax benefits. The profitability of a wind project often depends on obtaining certain federal and national benefits for renewable energy projects. Production tax credits (“TPPs”) and investment tax credits are currently only available for projects in which the taxpayer began construction before January 1, 2019. The amount of TPC has fallen by 20% in 2017, 40% in 2018 and 60% in 2019. Accelerated depreciation (MACRS) is also part of the current federal wind development support and promotion regime. In addition to federal incentives receiving tax assistance, many federal states offer tax incentives for wind projects. The proponent of the project must be aware of the specific requirements it must meet in order to obtain these benefits when negotiating the supply of turbines and the balance of installation contracts. A broader discussion of these issues is presented in Chapter 10 of this book. III. Balance of facility planning, engineering and construction services.

As described above, wind project designers generally acquire licenses for the use of the manufacturer`s technology in the context of purchased wind turbines. Significant planning and design work remains required, including geotechnical studies, micro-sites, the design and construction of crane pallets and turbine foundations, road and other earthwork construction, environmental degradation and related activities, as well as collection systems, switching stations, connecting lines and interconnection lines. , and possibly transmission lines. This design, as well as the acquisition and construction record of the associated facilities, could be carried out by the turbine supplier under one or more agreements, but are generally provided by a third party who, under an agreement with the project proponent, sub-treats directly with the project proponent. The turbine supply contract required a credit for the purchase price of the wind turbines minus the reservation payments for the turbines. I. Construction agreements. The various agreements for which a project promoter must conclude are decisive for the development of a wind project: B. Repowering. There are also new ways to develop first-generation wind projects in the United States. The state of California was one of the first places in North America to carry out large-scale wind energy projects in the 1980s.

With technological advances in wind turbine design, developers are looking for ways to regenerate existing sites with proven wind resources with modern wind turbines capable of producing larger production capacity with fewer turbines. Given this participation and in order to avoid problems arising from potential inconsistencies, the project proponent should be willing to present lenders and investors with a consistent and convincing set of project agreements and listen to their proposals for these agreements. In addition, a project proponent should be prepared for the ability of lenders and investors to make substantial changes to negotiated agreements. For example, lenders will often be interested in the financial and operational viability of the project (as a feasibility study might reflect) and much of this interest will necessarily focus on the developer`s rights under the corresponding agreements. In particular, lenders will be interested in the size, limitation and operation of guarantors, contractor benefits, insurance policies, steps and payments for progress or performance tests, as well as performance and payment guarantees.