Bilateral Contracts for Power
November 5
,
2012
David Elliott
,
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Guidelines and tips
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community
Ask the community for help and clear up your study doubts
University Rankings
Discover the best universities in your country according to Docsity users
Free resources
Our save-the-student-ebooks!
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
Bilateral Contracts for Power: Understanding Energy and Capacity Agreements, Lecture notes of Contract Law
An overview of bilateral contracts for power, explaining the concept, definitions, types, and items involved. It covers power and capacity, heat rate, operating and maintenance costs, market price, generating units and plants, and various types of contracts such as sale, purchase, energy, and capacity contracts. It also discusses items like source of energy/capacity, energy/capacity amount, time period of the contract, energy cost determination, capacity cost determination, environmental costs, transmission costs, and delivery point.
Typology: Lecture notes
2021/2022
1 / 15
This page cannot be seen from the preview
Don't miss anything!
Related documents
Partial preview of the text
Download Bilateral Contracts for Power: Understanding Energy and Capacity Agreements and more Lecture notes Contract Law in PDF only on Docsity!
Bilateral Contracts for Power
November 5, 2012
David Elliott
,
What is a Bilateral Contract?
•^
Basically it is a written agreement between two parties in whicheach party promises a performance. In other words, one party
t^
id
t^
th
th
t^
f^
t Th
agrees to provide power to the other party for a payment. Thegeneral characteristics of these contracts include price, timelimits, and defining the two parties.
Definitions (cont)
•^
- Market price – The price of a hourly sale or purchaseavailable in any point in time which is available to multiple
ti^
T^
i^
ll^
t b
R
i^
l T
i^
i
parties. Typically set by Regional TransmissionOperator/Independent System Operator such as SPP, MidwestISO, PJM.8 G
ti^
it^
B il
/t^
bi
b^
ti^
t^
bi
i d
•^
- Generating unit – Boiler/turbine, combustion turbine, windturbine, etc. -^
- Generating plant – Several generating units at a site. Mayi^
l d
l t
f^
ti^
it
include several types of generating units.
Types of Contracts
-^
1. Sale Contract – Utility signs contract/agreementwith other utility/entity to provide a certain amount of
y^
y^
p
power for a price. Considered off system sales.
-^
2. Purchase Contract – Utility signs an
t^
t/^
t^
ith
th
tilit /
tit
t
contract/agreement with another utility/entity topurchase a certain amount of power for a price.Referred to as purchased power.
Types of Contracts (cont)
•^
- Energy Contract – Can be either a sale or purchase.Contract/agreement is for energy only. No expectation of
it^
t^
f t
ti^
A
t^
t^
ith
t^
it
capacity as part of transaction. A contract without capacity, mayresult in energy not being available at all times.
-^
- Capacity Contract – Can be either a sale or purchase.Contract/agreement includes energy and capacity. A contractwith capacity has the possibility of providing energy at all times.
Items of a contract
•^
- Source of energy/capacity– a) Generating unit specific – the contract specifies that the
energy and/or capacity will be generated by a specificgenerating unit. Typically means when the generating unit isnot available due to outages the energy/capacity is not
il bl available.
- b) Non generating unit specific – the contract does not
specify that the energy/capacity will be generated by a
ifi
ti^
it T
i^
ll^
th t
il bl
specific generating unit. Typically means that any availableunit could be used for contract. Which also eliminates theoutage concerns.
Items of a contract (cont)
•^
- Energy/capacity amount– a) Fixed amount not to exceed– b) Fixed amount must take– c) Variable amount with minimum and maximum limits– d) Variable amount based on output – hydro wind solar
d) Variable amount based on output
hydro, wind, solar
Items of a contract (cont)
•^
- Time period of contract– a) length of contract – weeks, months, years– b) Length of commitment for energy/capacity
- Hours in a day – such as the term5x16, which meansavailable 5 days a week, 16 hours a day.
y^
,^
y
- Days of a week
- c) Extensions – may include any changes to the terms of the
contract such as costcontract, such as cost.
Items of a contract (cont)
•^
- Capacity Cost Determination – Demand Charge–
a) Fixed rate per kW
($/kW-month) x months x kW
–^
b) Typically paid regardless of amount of energy taken.
-^
c) Capacity costs may be determined by the level of energyc) Capacity costs may be determined by the level of energycosts. Higher capacity costs may result in lower energycosts, or the opposite may occur.
Items of a contract (cont)
-^
6. Environmental Costs
a) SOx and NOx creditsa) SOx and NOx creditsb) Limestone for scrubbers
-^
7. Transmission Costs – who pays
-^
8. Delivery point
-^