# SMR Offtake PPA Template v1.0 **Open-source. Published by ReactorN Intelligence.** **Not legal advice. For pre-operational Small Modular Reactor offtake agreements.** ## Scope Offtake agreements for **Small Modular Reactors (SMRs)** — typically 50-300 MW per module, with deployment 2028-2033 timeframe. Distinct from existing fleet PPAs because the Facility doesn't exist yet and development risk is material. **Use when:** - Seller is an SMR developer (NuScale, TerraPower Natrium, X-energy Xe-100, Oklo Aurora, Kairos Hermes, BWXT BWRX-300, Westinghouse AP300, Radiant Kaleidos) - Buyer is committing to offtake from a reactor under development - Agreement executes BEFORE Construction Operating License (COL) or first-of-kind operating authorization ## Why SMR PPAs are different 1. **Facility doesn't exist.** Development, licensing, construction, and commissioning risk all real. 2. **Capex-heavy first-of-a-kind projects** — Buyer commitment often backstops financing. 3. **Regulatory pathway uncertain** for first-of-kind designs under NRC Part 53. 4. **Supply chain + first-fuel risk** — HALEU availability for certain designs. 5. **Milestone-based structures dominant** — PPA can't be pure delivery-based. ## Structural choices | Structure | When used | Risk profile | |---|---|---| | **Firm offtake** from fixed-price construction | Mature SMR designs (BWRX-300 restart-adjacent) | Most Buyer-friendly | | **Milestone-based take-or-pay** | First-of-kind deployments | Shared risk | | **Price-indexed virtual PPA (VPPA)** | Financial-only offtake | Buyer holds energy, Seller gets financial certainty | | **Development + Offtake combined** | Buyer participates in development | Equity-adjacent | --- ## Section structure ### 1. Parties - Seller (SMR developer or project SPV) - Buyer - Site developer (if separate) - Financing parties (may be named as beneficiaries) ### 2. Definitions Standard plus: - **"Commercial Operation Date (COD) Target"** — projected in-service date - **"COL"** — NRC Construction Operating License under Part 50 or Part 52 - **"First Criticality"** — initial reactor criticality event - **"Development Milestones"** — licensing, construction, fuel load, criticality, full power - **"Contract Capacity"** — the MW commitment for offtake - **"Fuel Assurance"** — HALEU or LEU supply contract backing the offtake ### 3. Pre-Operational Period **Critical SMR section.** PPA obligations before COD: - **Milestone payments** (optional): Buyer pays Seller at named milestones - COL issuance - Construction start - First fuel - First criticality - COD - **Milestone delay remedies:** - Grace period per milestone (typically 6-12 months) - After grace: price adjustment OR Buyer walk right - Liquidated damages cap at Buyer's sunk commitment - **Information rights:** Buyer receives quarterly project updates, site visits, technical review participation ### 4. Conditions Precedent to Commercial Delivery More extensive than existing-fleet PPAs: - NRC COL issued and operational license granted - First Criticality achieved - Full-power operation sustained for 30 days - Site interconnection agreement final - Fuel Assurance contract for 10+ years in effect - Applicable state PUC approvals ### 5. Commercial Delivery Phase - Post-COD: standard FTM or BTM PPA structure applies (reference PPA_FTM or PPA_BTM) - Term starts at COD, typically 20-30 years (longer than existing-fleet due to amortization needs) - Pricing often has two phases: - COD-Year 5: Premium pricing reflecting first-of-kind cost - Year 6+: Lower pricing reflecting amortized capex ### 6. Pricing First-of-kind SMR PPAs observed in 2024-2026: - Range: $85-$160/MWh (significantly above fleet nuclear) - Escalator: CPI + 1-2% fixed premium - Capacity payment sometimes separated ($XX/kW-month) **Price reopener triggers:** - Capex overrun >20%: price adjustment or Buyer walk - Capacity factor in first 3 years <75%: renegotiation - Regulatory cost changes >25%: bilateral renegotiation ### 7. Technology Risk Allocation - **First-of-kind performance guarantee:** Seller provides minimum availability guarantee (typically 85-90% in Years 1-3, 92%+ thereafter) - **Technology failure event:** defined as sustained <50% capacity factor over 12 consecutive months - Buyer remedy: termination with liquidated damages per schedule - Seller cure right: 12 months to remediate ### 8. Development Financing Linkage - PPA often serves as credit backstop for project financing - Buyer credit (or its parent) is material to financeability - Lenders may have direct rights: - Direct notices of default - Step-in rights - Consent to amendments ### 9. Environmental Attributes - REC/ZEC ownership negotiated (typically Buyer) - Buyer's ESG reporting uses SMR as low-carbon generation per applicable registries - Pre-COD: no operational attributes; post-COD: standard ### 10. Termination and Milestones - Termination for milestone failure: tiered liquidated damages - Termination for convenience (Seller): limited, and requires full return of Buyer commitments + PV damages - Termination for convenience (Buyer): permitted pre-COD with LD schedule ### 11-14. Standard provisions FM (with broader definition including NRC design certification failure), credit support, confidentiality, disputes. --- ## Commercial terms worksheet | Term | Value | Notes | |---|---|---| | SMR technology | | NuScale / X-energy / etc. | | MW capacity | | | | Projected COD | | Year 2028-2033 typical | | Pre-operational commitment | $ total | Milestone payments | | Contract term post-COD | years | 20-30 typical | | Years 1-5 pricing $/MWh | | | | Years 6+ pricing $/MWh | | | | Availability guarantee Y1-3 | % | 85-90% typical | | Availability post Y3 | % | 92%+ | | First-of-kind cap on buyer exposure | $ | | | Technology failure threshold | % CF | 50% typical | | REC / ZEC ownership | | | | Buyer parent guarantee | | Usually required | --- ## Risk heat map for SMR PPAs | Risk | Likelihood | Mitigation | |---|---|---| | COD delay | **High** | Milestone structure + grace periods + walk right | | Capex overrun | **High** | Price reopener + first-of-kind cap | | Regulatory pathway failure | Medium | Technology failure event + termination remedy | | Fuel supply (HALEU) | Medium | Fuel Assurance contract as CP | | Performance guarantee shortfall | Medium | Sliding availability guarantee | | Site / permitting delay | Medium | Separate site dev agreement | | Financing failure | Medium | Buyer commitment backstops financing | --- **License:** CC BY 4.0 — attribute "ReactorN Intelligence PPA Template v1.0"