RETScreen ® Legal Aspects of Clean Energy Projects

1. Biomass Fired Power Plant, USA RETScreen® Legal Aspects ofClean Energy Projects Photo Credit: Andrew Carlin, Tracy Operators/NREL PIX

2. Objectives • Raise awareness of legal issuesaround clean energy projects • Outline key legal documents that are used in clean energy projects • Introduce participants to the RETScreen Legal Documents Toolkit

3. Question What are the legal barriers to the developmentand implementation of clean energy projects?

4. Legal Barriers • Legal documents for a clean energy project must be: • Appropriate • Comprehensive • Customized • Costs on an average project can range from tensto hundreds of thousands to millions of dollars

5. 600 kW Wind Turbine installation Risk • Legal aspects of a clean energyproject are fundamentally about identifying, managing,and mitigating risk • Shielding from liability Photo Credit: Nordex Gmbh

6. What is RETScreen? • World’s preeminent clean energy decision-making software • 35 languages covering more than 2/3rds of the world’s population • More than 186,000 users in 222 countries • Provided free-of-charge by the Government of Canada

7. www.retscreen.net

9. RETScreen Legal Documents Project • In keeping with RETScreen’s objective of reducing the transactional costs/barriers to clean energy projects,the Project Goal is to help reduce legal barriers by: • Making the legal requirements of a clean energy project more accessible • Bringing together sample legal documents freely available overthe Internet that can be used as templates, examples, or customized • Developing new documents for public use where none exist

10. Project Partners • Led by RETScreen International/CanmetENERGY/Natural Resources Canada (NRCan)/Government of Canada • Partnership with Energy + Environment Foundation • With pro bono contribution of content by lawyers from leading firmsin New York and Washington • Financially supported by a grant from the Renewable Energy and Energy Efficiency Partnership (REEEP)

11. Energy + Environment Foundation • Strengthen energy and environmental education in developing countries • Promote renewable energy • Build capacity to solve energy and environmental challenges

12. RETScreen Legal Documents Toolkit • Legal Aspects Web Portals (atwww.retscreen.netand www.energyenvironmentfoundation.org) • Also available within the RETScreen User Manual (in V4 of the software) • e-Textbook Chapter and Training Slides

13. Importance of Legal Counsel • Complexity of energy-related legal agreements • Highly dynamic nature of clean energy law • Differing interests/power imbalances • Transfer of risk

14. Legal Framework • Role in project • Type of project • Scale of project • Timing of project Photo Credit: Nordex Gmbh

15. Legal Framework (continued) Legal Environment: • Obligations vs. considerations • Jurisdiction and paramountcy • International Law

16. Project Legal Documentation

18. Real Property • Broad category of documents related to the physical land and/or facilities that will be involved in the project • Green Lease

19. Regulatory and Permitting • Regulatory issues: obligations to a level of governmentto either perform an action or refrain from performingan action • Permitting: the formal approval process given by a levelof government to allow the project developer to engagein an activity or action

20. Power Purchase Agreement • Fundamentally, an agreement for the purchaseand sale of electricity • Perhaps the central legal document in a cleanpower project • Level of complexity

21. Energy Performance Contract • Agreement to make energy-saving capital and operational improvements to a building or industrial facility • Normally financed through the cost savings resultingfrom improved energy performance • Role of ESCOs

22. Design, Engineering, Procurement, Fuel Supply, Construction, O&M • Broad suite of documents to build and run the project • BOT and BOOT • Fuel Supply • Tendering

23. Interconnection Agreement • Secures a right to feed generated electricity into the grid • Often integrated into PPA • Transmission Agreement Photo : SNC-Lavalin

24. Environmental • Environmental Impact Assessment • Emissions Trading Agreement • ERPA • Environmental Attributes Trading Agreement

25. Other Legal/Quasi-Legal Issues • Corporate Structure • Monitoring, Targeting & Verification • Intellectual Property • Dispute Resolution

26. Other Legal/Quasi-Legal Issues • Decommissioning • Labour • Indigenous Peoples & Ethnic Minorities • NIMBY Factor

27. Project Finance • Legal strategy + documentation = $$$ • Equity Financing • Debt Financing • Public-Private Partnership

28. Government-Linked Financing Financial Incentives • Tax incentives • Net-metering Legislated Incentives • RPS/EEPS • Feed-in Tariff Photo Credit: Strong, Steven DOE/NREL

29. Typical Financial Documentation Overall purpose is to… • Provide incentive to the lenders to advance monies; AND • Provide security to lender for monies advanced • SECURITY is key as is management of risk

30. e-Textbook Chapter & Slides See e-Textbook Clean Energy Project Analysis: RETScreen® Engineering and Cases Legal Aspects of Clean Energy Projects Chapter

31. Conclusions • Legal issues and documents are an important part of anyclean energy project AND can represent a major expense • RETScreen has developed tools that will raise awarenessof legal issues in clean energy projects and reduce transactional legal costs • Project developers may experience significant savingsby taking advantage of the documents and tools thathave been identified and developed

32. Disclaimer The RETScreen Training Course (i.e. presentation slides, e-Textbook chapters, linked documents, etc.)is provided for informational purposes only and does not necessarily reflect the views of the Government of Canada nor constitute an endorsement of any commercial product or person. Neither Canada nor its ministers, officers, employees or agents make any warranty in respect to this Training Course or assumes any liability arising out of the use of this Training Course.The documents linked to herein are examples of documents available through a free and public Internet search. They are provided to the public as information resources only. No warranty, express or implied,is made by the Government of Canada, Natural Resources Canada, CanmetENERGY, RETScreen International (collectively "Natural Resources Canada") or any of its employees or consultants with regards to any aspect of the documents, including but not limited to their proprietary or intellectual property status. Natural Resources Canada does not accept any responsibility or liability for loss or damage through unauthorized use or misuse of the documents, or through lack of appropriateor sufficient due diligence. The legal documentation linked to: • is not necessarily comprehensive, complete, accurate, or up-to-date; • is linked to external sites over which Natural Resources Canada has no control and for which Natural Resources Canada assumes no responsibility; and • does not constitute professional or legal advice. If you require specific legal advice,you should always consult a qualified professional.

33. Questions? Legal Aspects of Clean Energy Projects Module RETScreen® International Clean Energy Project Analysis Course For further information please visit the RETScreen Website at www.retscreen.net