The legal basis of renewable energy contracts
Renewable energy contracts in Georgia rest on several interrelated institutions of the law on energy: the promotion of electricity generation, the supply activity, the market of bilateral contracts and the right to choose a supplier. The sale of electricity generated from renewable sources happens precisely through a combination of these institutions, so before concluding a contract it is important to know exactly the boundaries of each — at what price trading takes place, on which market, and who may change supplier.
The choice of contractual strategy for a renewable project rests on three questions. First — the sales channel: a direct bilateral contract with a consumer or trading through a supplier; each case involves different reporting obligations and a different logic of price formation. Second — support: if the project uses a support mechanism, the terms of the contract derive from the framework of that mechanism and not from free negotiations. Third — timing: the stages of opening the market change with whom and under which rules a contract may be concluded, so the term of the contract must be reconciled with the concept of the market model.