Energy storage power station project epc contract

What is an EPC agreement for a battery energy storage system?

The negotiation of an engineering, procurement and construction (EPC) agreement for a battery energy storage systems (BESS) project typically surfaces many of the same contractual risk allocation issues that one encounters in the negotiation of an EPC agreement for a solar or wind project.

Do solar projects need an EPC contract?

In our experience, most utility-scale solar projects use an EPC Contract. An operation and maintenance agreement: This is usually a medium- to long-term Operating and Maintenance Agreement (O&M Agreement) with an Operator. The term of the O&M Agreement will vary from project to project.

How do energy storage contracts work?

For standalone energy storage contracts, these are typically structured with a fixed monthly capacity payment plus some variable cost per megawatt hour (MWh) of throughput. For a combined renewables-plus-storage project, it may be structured with an energy-only price in lieu of a fixed monthly capacity payment.

Will EPC contracts provide for the handover of a solar facility?

EPC Contracts will not provide for the handover of the solar facility to the Project Company, and the PPA will not become effective until all commissioning and reliability trialling has been successfully completed.

Do EPC contracts impose PLDs?

Most, however, do not impose PLDs. EPC Contracts impose PLDs because the achievement of the performance guarantees has a significant impact on the ultimate success of a project. Similarly, it is important the solar facility commences operation on time given the liability the Project Company will have under other project agreements.

How do EPC contracts work?

As for the payment, the EPC contracts typically provide for a payment schedule running in parallel with the construction milestones agreed between the parties.