Following the announcement last year by the Department of Energy and Climate Change that large scale solar projects will not be eligible for Renewables Obligation ("RO") support after 1st April 2015 OFGEM has issued draft guidance for consultation, detailing availability of grace periods for affected parties.
While RO schemes are to be closed generally to new capacity with effect from 31st March 2017, the announcement last year that large scale solar projects of over 5MW capacity would be singled out for early closure caused consternation in the industry.
OFGEM has clarified that while it will not accept any applications for accreditation for large scale solar from 1st April 2016, between 1st April 2015 and 31st March 2016 operators will be entitled to submit an application for accreditation along with grace period evidence. Provided the station in question is commissioned by 31st March 2016, and other RO eligibility criteria are met, support will be available under the RO.
Operators may apply for grace periods where (i) they have made significant investment decisions on or before 13th May 2014 (ii) grid connection delays have taken place outwith their control and (iii) preliminary accreditation was granted on or before 13th May 2014.
To meet the significant investment test operators need to be able to demonstrate that planning permission has either been obtained or applied for (or is not required), that a grid works offer was made and accepted on or before 13th May 2014 and that the operator of the station or a connected party had a property interest in the station as at 13th May 2014, either in the form of ownership, lease, option to lease or exclusivity.
To meet the grid connection delay test operators must show evidence of an agreement with the network operator for grid works, an estimate by the network operator of a completion date for such works (no later than 31st March 2015), a letter or email from the network operator confirming that the estimated date was missed and a statement from the network operator that failure to meet such date was not the fault of the developer. The final item is a declaration by the operator that the station would have been commissioned by 31st March 2015 if the grid works had been completed by the estimated date.
Operators applying for the preliminary accreditation grace period do not require to provide any additional information.
It can be anticipated that it may be difficult for operators to obtain confirmation from network operators of estimated works completion dates and/or confirmation that such dates have been missed through no fault of operators.
The consultation closes on 25th March 2015. In the meantime OFGEM has been holding workshops round the UK on its proposals and at a meeting in Glasgow on 29th January the consultation paper was discussed in detail with a number of affected stakeholders from the solar industry and professional advisers, including Turcan Connell, contributing to the debate.
Solar PV developments of a capacity of 5MW or under will continue to have until 31st March 2017 to be commissioned and eligible for support under RO. Solar PV developments may be eligible for support under Contracts for Difference.