Fuel Supply and Offtake
No matter what your project or business needs, securing an efficient and reliable source of fuel is essential. With energy prices increasing, this has never been more critical. Our Renewables, Energy & Resources Group advises clients on all aspects of their fuel supply chain, whether domestic and international coal and biomass procurement for large-scale power generation, supply of solid recovered fuel produced by energy from waste facilities, transportation of those fuels stocks, high volume power purchase or the arrangements for the supply of gas and electricity to business premises.
Given our experience across the entire supply chain, and having acted for buyers and sellers of these fuels, we can advise you to ensure you get the best commercial outcome possible for your project or business. Some of our recent experience includes:
- Coal and biomass: We advise Drax Power on its domestic and international procurement of coal and biomass for the largest coal-fired power station in Western Europe. Biomass is co-fired with coal in the power station to improve economics and emissions levels. In addition to advising on spot and long term transactions, we provide training and contract development support to the legal and commercial teams involved in this area. While the transactions are generally based on Incoterms (or, sometimes in the case of coal, SCoTA), we have helped Drax with a major overhaul of its coal and biomass procurement precedent contracts.
- Solid Recovered Fuel (SRF) and Refuse Derived Fuel (RDF): The team has advised a number of local authorities on the supply of SRF and RDF by the appointed waste contractor to a new dedicated biomass power station in Yorkshire. This involved a detailed review of the contracts, bringing to bear our experience in a wide range of fuel supply arrangements to ensure that the supplier’s (and therefore the authorities’) risks are appropriately limited and understood. We are also advising a contractor in another project on the supply of SRF by it to another party as fuel for cement kilns.
- Fuel logistics: Our logistics specialists advised Drax Power on renegotiation of its contracts with a number of major rail freight operators. In addition to having to understand the rail freight issues that have to be dealt with on behalf of our client, the team had to work closely with our fuel procurement lawyers to ensure that the provisions of the rail freight agreement complement the terms on which Drax procures its coal and biomass.
- Energy supply terms and conditions: We have recently advised a major retail chain on the terms and conditions of its electricity supply contracts with two of the “big six” energy suppliers. Both sets of arrangements involved our client being able to use flexibility arrangements to set its own electricity price based on market rates. In addition, we helped our client negotiate changes to the suppliers’ proposed terms and conditions, ensuring our clients were not exposed to unnecessary risk. We have also worked with a large energy supplier, providing advice to its retail business on energy supply contracts with a variety of consumers, This experience means that we understand the approach that energy suppliers will take in seeking to agree contracts with consumers, experience that we can use to the benefit of consumers looking to efficiently minimise risk in these contracts.
- Pipelines: The Group advised the Oil and Pipelines Agency in relation to the award of a large operation and maintenance contract for the strategic Government Pipeline Storage System, with the successful contractor responsible for asset management and capital project delivery in addition to operations and maintenance of the entire network.