Feasibility
Before a project moves forward, this analysis helps determine whether the project makes technical, financial, and commercial sense.
What is a feasibility study?
The project team discovers a protected wetland within the planned construction footprint. The project layout must be adjusted, and additional environmental approvals may be required before construction can begin.
The project development team should take any or all of these actions to keep the project moving while remaining compliant with permitting requirements.
What is coordinate with permitting agencies, update the project design as needed, and secure the required environmental approvals before proceeding with construction?
A government agency requires a project to obtain this approval before construction can begin, as the project cannot legally proceed without it.
What is a permit?
An operating battery energy storage facility receives notice that new fire safety regulations have been adopted by the local authority. The facility’s existing permits were approved before these requirements were implemented. The Operations team should do this to determine the appropriate next steps.
What is: What is review the new requirements with the permitting authority and confirm whether the facility needs permit updates, additional approvals, or operational changes to remain compliant; if required implement processes to ensure ongoing compliance?
A project is almost complete, but the contractor says it is entitled to final payment even though several contractual completion requirements remain outstanding. These contractual mechanisms are what the project team should examine to ensure the contractor has met their requirements.
What are the conditions to mechanical completion, substantial completion, or final completion—and the related payment provisions?
This agreement is often used to allow a company to obtain certain rights to a property before deciding whether to acquire or lease it.
What is an option agreement?
A new regulation is introduced while an energy project is being developed that could change the project’s operating requirements and financial assumptions. The project team must do this to understand the impact before making further commitments.
What is: What is monitor regulatory changes and assess their impact on the project?
A project needs this type of temporary workspace during construction to stage equipment and materials but does not need permanent rights to this area.
What is a laydown yard?
A project has been operating for many years, but the project’s lease agreement is approaching expiration. The legal and commercial teams should review this before simply allowing the lease to expire.
What are review the amendment rights, notice requirements, and reach out to the landowners to negotiate an extension?
Your team discovers that a proposed project site with strong development potential contains several habitat features that are highly favorable for an endangered species (say, Pygmy owls, for example) to breed, and the species is known to frequent the area. If the species is confirmed on-site, the project could face significant construction delays because construction noise may disrupt its breeding season, and environmental restrictions may prevent the removal of vegetation that makes the site suitable habitat.
This project development stage is specifically intended to identify these types of environmental and permitting risks before significant capital is committed.
What is feasibility due diligence?
A proposed project requires connecting to the electrical grid. Before the project can reliably determine its grid connection costs and requirements, it will generally need to go through this process.
What is: “The Interconnection Process?"
The project has a signed lease, but the legal description does not cover the area where a critical facility will actually be located. This type of additional agreement or change may be needed.
What is seek a lease amendment, easement, or other additional land rights?
A contractor is not meeting its schedule and the project is falling behind. The project team should look at these contractual provisions first for a potential remedy.
What are schedule, delay, liquidated damages, and termination provisions?
The operations team for a project discovers that a contractor's work caused damage to the facility. These contractual provisions should be reviewed to determine who bears the resulting cost.
What are indemnification, warranty, limitation of liability, and insurance provisions?
A profitable energy project has been operating successfully for 10 years, and the project company owns the land where the facility is located. A telecommunications company approaches the project team with a request to upgrade an existing communications pole on the property. The pole has historically been used only by the project; however, the telecommunications company wants to enhance the infrastructure to support additional planned energy projects in the surrounding area. The Operations & Maintenance (O&M) team should do this.
What is work collaboratively with the telecommunications company to evaluate the opportunity while ensuring any agreement aligns with the project owner’s operational requirements, contractual obligations (including under loan or LLC operating agreements), financing requirements, board approvals, and other governing constraints.
Before building a battery storage facility within a city, developers must find out if the city will allow the project on the proposed land. The city may apply these very local set of rules, dictating what can be built in certain areas.
Answer: What is/are the project site’s zoning laws,?
A contract says a party must provide notice within 10 days, but the business team discovers the issue on Day 9 and wants to wait until next week to involve Legal. If the project team delays, this may occur.
What is a contractual notice deadline and, potentially, a waiver or loss of rights?
The EPC contractor argues that this event has occurred due to an unexpected event outside of its control that has caused a delay and claims additional time and money.
What is force majeure?
This contractual provision can require a party to compensate another party for specified losses, claims, damages, or liabilities.
What is indemnification and or liquidated damages?
A counterparty has allegedly breached an agreement, and the project team asks Legal to send an email notifying them of the breach. What should Legal check before sending the notice?
What is the agreement’s notice provision. An email may not constitute valid contractual notice if the agreement requires notice to be delivered to a specific address, by a specific method, or to a designated recipient.
The project team wants to move forward with a site, but Legal discovers that the AP does not yet have the property rights necessary to conduct all of the proposed development activities. Therefore, there may be a lack of this.
Answer: What is site control?
The project team is negotiating an EPC agreement, and the contractor proposes language stating that it will use “commercially reasonable efforts” to achieve the project’s required completion date. Legal is concerned about the language for this reason.
What is because commercially reasonable efforts may not create a firm obligation to meet the required completion date. If the project misses COD, AP could owe delay liquidated damages under the PPA, tolling, or offtake agreement without having a clear contractual remedy against the contractor. AP should consider defined milestones, delay remedies, extensions of time, and liquidated damages for late completion.
A project team wants to begin work on a parcel immediately because the schedule is tight, but the company discovers that the person who signed the agreement may not have had authority to bind the property owner. If the team commences construction or development activities before confirming that the company has valid rights to the property, these are the potential ramifications.
Answer: What are trespass, breach of contract, title insurance issues, and liability and additional costs/delays.
A project is operational, and the project team wants to make a significant modification to the facility. The team should consider this before proceeding.
What is consider whether the modification could trigger requirements under the project's permits, financing documents, interconnection agreement, EPC or O&M agreements, warranties, insurance policies, or other contractual obligations.
Our outside counsel emailed us a draft settlement agreement with counsel's mark-up notes summarizing our legal strategy and advice on what to negotiate for in the settlement. We would like to get some insights and review from one of our outside consultants. This communications protection may be waived if such materials are shared with the third party consultant.
What is attorney-client privilege? Sharing a privileged legal communication with a third party generally does waive the privilege. The core rule is that attorney-client privilege only protects confidential communications between a lawyer and client made for the purpose of obtaining or giving legal advice, not business advice or underlying facts. Once the client voluntarily discloses that communication to someone outside the privileged relationship, courts typically treat the confidentiality (and therefore the privilege) as broken.