With the recent increase in solar power generation projects, cases of the Korea Electric Power Corporation (KEPCO) requesting additional facilities during the grid connection process are becoming more frequent. In response, Attorney Sungwoo Kim of Law Firm Solaris pointed out the legal standards for who should pay the costs when additionally installing a line voltage regulator (SVR) after completing an EPC construction contract in a column recently contributed to the media.
Through the contribution, Attorney Sungwoo Kim summarized the entity responsible for the cost and prevention of disputes as follows:
(Principle of Cost Burden) If the installation of the line voltage regulator is not specified in the construction contract, the client in principle bears the cost. This is in accordance with the Supreme Court precedent that inevitable additional construction undertaken to obtain approval from public institutions is deemed to be directed by the client.
(Exception of Contract Interpretation) If the range of construction was broadly set in a turnkey method that builds all facilities necessary for the normal operation of the power plant, the construction company may pay the cost depending on the interpretation.
(Precautionary Measures) To prevent this, when entering into a contract, clauses must be specified in the contract to exclude additional facilities for grid connection approval from the scope of construction and exempt liquidated damages due to construction delays.
Law Firm Solaris will help the stable business operation of companies by providing legal advice that can be applied directly to practice in the fields of energy regulation and power plant construction disputes.
- Original text of the article: Who bears the additional cost of KEPCO's demand to install SVR
- Introduction link of Attorney Sungwoo Kim: https://solarislaw.net/member-coo
Who Bears the Additional Cost for KEPCO's SVR Installation Requirement
As solar power projects expand, the Korea Electric Power Corporation frequently requests additional facilities during the grid connection process. In a recent media column, Attorney Sungwoo Kim at SOLARIS addressed the legal standards for allocating the costs of additionally installing a Step Voltage Regulator after finalizing an EPC construction contract.
In the column, Attorney Kim summarized the responsible parties for these costs and the preventive measures as follows:
(General Principle) The client generally bears the cost unless the construction contract explicitly includes the installation of the Step Voltage Regulator. Supreme Court rulings view inevitable additional work required for public agency approval as directed by the client.
(Exception in Interpretation) If the parties sign a turn-key contract with a broad scope covering all facilities for normal operation, the contractor might have to bear the expenses depending on the contract interpretation.
(Preventive Measures) To prevent disputes, businesses should include clauses during the contracting phase to exclude mandatory additional facilities from the construction scope and exempt the contractor from liquidated damages for related delays.
SOLARIS will continue providing practical legal advice in energy regulation and power plant construction disputes to help companies operate stably.