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Energy Purchase Agreement
I need an energy purchase agreement for a renewable energy project, specifying a 10-year term with fixed pricing and a minimum purchase obligation. The agreement should include provisions for grid connection, performance guarantees, and penalties for non-compliance.
What is an Energy Purchase Agreement?
An Energy Purchase Agreement is a long-term contract where a business agrees to buy electricity directly from a power producer, typically a solar or renewable energy provider in Singapore. These agreements help companies secure stable energy prices while supporting clean energy development under the Energy Market Authority's frameworks.
Under these agreements, the power producer usually installs and maintains the energy systems (like solar panels) on the buyer's property, while the buyer commits to purchasing the generated power at pre-agreed rates. This arrangement has become increasingly popular as Singapore pushes toward its Green Plan 2030 goals, offering businesses both cost predictability and environmental benefits.
When should you use an Energy Purchase Agreement?
Consider an Energy Purchase Agreement when your business needs reliable, long-term power supply while managing energy costs. This contract makes particular sense for companies with high electricity consumption or those looking to meet sustainability targets under Singapore's carbon tax framework and Green Plan 2030.
The agreement works especially well for businesses with suitable roof space or land for solar installations, as it allows you to benefit from renewable energy without large upfront investments. It's also valuable when you need to lock in electricity rates for budget certainty, or when seeking to enhance your company's environmental credentials for ESG reporting requirements.
What are the different types of Energy Purchase Agreement?
- Power Purchase Contract: Basic agreement for direct energy purchases, commonly used by smaller businesses with simple consumption needs
- PPA Agreement Solar: Specialized for solar installations, including technical specifications and performance guarantees
- Corporate Power Purchase Agreement: Comprehensive version for large organizations, featuring detailed risk allocation and complex pricing structures
- Third Party Solar Power Purchase Agreement: Involves multiple parties, ideal for shared facilities or multi-tenant buildings
- Green Power Purchase Agreement: Focuses on renewable energy certificates and environmental attributes compliance
Who should typically use an Energy Purchase Agreement?
- Power Producers: Solar developers, renewable energy companies, or utilities who generate and sell electricity under the agreement's terms
- Commercial Buyers: Businesses, manufacturing facilities, or data centers seeking long-term energy price stability and green credentials
- Legal Teams: Corporate lawyers and energy specialists who draft and negotiate the Energy Purchase Agreement's terms
- Technical Consultants: Engineers and energy experts who assess feasibility and verify system performance specifications
- Facility Managers: Oversee installation, maintenance access, and ongoing operations at the buyer's premises
- EMA Officials: Energy Market Authority representatives who ensure compliance with Singapore's electricity licensing requirements
How do you write an Energy Purchase Agreement?
- System Details: Gather technical specifications of the energy system, including capacity, expected output, and installation requirements
- Price Structure: Determine energy rates, payment terms, and any escalation clauses aligned with Singapore's electricity market
- Site Assessment: Document property details, access rights, and installation locations with engineering reports
- Performance Metrics: Define minimum generation guarantees and measurement methods
- Compliance Check: Verify alignment with EMA regulations and Green Mark certification requirements
- Maintenance Plan: Outline responsibilities for system upkeep, monitoring, and repairs
- Exit Strategy: Define contract termination conditions and equipment ownership transfer terms
What should be included in an Energy Purchase Agreement?
- Party Details: Full legal names, registration numbers, and authorized representatives of both energy producer and buyer
- System Specifications: Detailed description of energy system, installation location, and technical parameters
- Pricing Terms: Energy rates, payment schedule, and adjustment mechanisms under Singapore's electricity regulations
- Performance Standards: Minimum generation guarantees, quality specifications, and measurement protocols
- Term and Termination: Contract duration, renewal options, and early termination conditions
- Risk Allocation: Force majeure provisions, liability limits, and insurance requirements
- Regulatory Compliance: EMA licensing requirements and environmental standards adherence
- Dispute Resolution: Mediation procedures and Singapore court jurisdiction clauses
What's the difference between an Energy Purchase Agreement and an Asset Purchase Agreement?
An Energy Purchase Agreement differs significantly from a Asset Purchase Agreement in several key aspects, though both involve significant financial commitments. While an Energy Purchase Agreement focuses on ongoing power supply and generation, an Asset Purchase Agreement deals with one-time transfers of physical or intangible assets.
- Duration of Relationship: Energy Purchase Agreements establish long-term, continuous supply relationships, often 15-25 years; Asset Purchase Agreements typically conclude after the asset transfer
- Payment Structure: Energy agreements involve recurring payments based on actual power consumption; asset deals usually have a single payment or defined installments
- Regulatory Framework: Energy agreements must comply with Singapore's EMA regulations and green energy requirements; asset transfers follow general commercial law
- Performance Obligations: Energy agreements include ongoing maintenance and performance guarantees; asset deals focus on condition at transfer and warranties
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