If you are the owner of an ageing wind, hydro or solar installation that receives Feed in Tariffs (FiTs), you may be considering replacing part or all of the generating equipment to upgrade your installation.
"Will repairing or replacing the generating equipment affect my accreditation?" This is something we are being asked increasingly often and, frustratingly, the FiT Legislation and Guidance is inconclusive on this point. But not for much longer.
On 7 June Ofgem published a Consultation setting out its proposed amendments to the FiT Guidance to clarify what equipment can be replaced without affecting accreditation.
Essentially, Ofgem intends that the replacement of generating equipment forming part of an ‘eligible installation’ alone won’t necessarily invalidate the accreditation, unless in doing so you breach other rules of the FiT Scheme. Examples of this would include the ‘eligible installation’ being:
- decommissioned in its entirety (which would involve replacing the generating equipment plus all assets up to the point of grid connection) or moved to another site;
- changed so that it no longer relies wholly or mainly on an eligible low-carbon energy source; or
- modified in such a way that the capacity of the installation changes.
This final bullet point has caused some concern, and RenewableUK has interpreted this to mean that where generating equipment is replaced the installed capacity must remain the same. That may not have been Ofgem’s intention, and certainly the amendments to the FiT Guidance as set out in the Consultation do not bear this out.
However, this is a point to keep an eye on when Ofgem publishes its decision, as it could mean that only like-for-like replacements are acceptable (and that may not always be possible, for instance, if the rating of the turbine is no longer available).
If you have any FiT-supported projects that you are considering re-powering, and you would like to discuss how this Consultation would impact them, please get in touch with Susan Swan, Senior Associate in our Energy and Commercial Contracts team, at email@example.com, or your usual Shepherd and Wedderburn contact.