Deals & Cases

Energy & Infrastructure 2019-04-24
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DR & AJU Provides Service Related to Renewable Energy Certificates (REC) Sales Contracts

Since 2011, the government has been implementing Renewable Portfolio Standard (RPS) as a central policy tool for efficient supply of renewable energy to reduce greenhouse gas as a means of response to climate change. Accordingly, a supplier of renewable energy gets to fulfills its obligation to supply by securing Renewable Energy Certificate (“REC”) applicable to its obligation through the autonomous procuring method (self-procuring) by constructing renewable energy plants, or through the method of purchasing REC (external procuring) at REC market (contract market or spot market) and submitting it to the government.

Company D, which was designated as a supplier of renewable energy, felt the need to prepare a standard contract that can be utilized by practitioners in relation to the REC sales contract to be concluded for the external procurement of REC using the contract market. Therefore, the company entrusted DR & AJU to perform REC-related services including the drafting of REC sales contracts.

DR & AJU minimized deviation among projects when preparing the REC sales contract by separating the REC sales contract templates into the general terms & condition and special terms & conditions; the contract items were divided into items commonly applicable to a renewable energy project and items to be applied individually according to the specificity of each project. In addition, DR & AJU made it possible for practitioners to intensely examine the items which were required to reflect the specificity of individual projects, and successfully wrapped up the services by composing items in the following aspects: the aspect of legitimacy such as legislations related to renewable energy, the aspect of flexibility towards economic situation or the government’s policy change, and the aspect of concrete feasibility that could reflect the specificity by individual project.