Last July we reported on Ofgem’s consultation on proposed amendments to its Feed in Tariff (FiT) Guidance to clarify what equipment can be replaced without affecting an installation’s FiT accreditation (see here).
Ofgem’s Decision
Ofgem issued its Decision on 13 December 2021, bringing welcome clarity to owners of ageing wind, hydro or solar installations. Ofgem’s Decision and updated FiT Guidance confirms that:
- replacing or temporarily removing generating equipment will not, in itself, affect an installation’s FiT accreditation, unless doing so breaches FiT scheme rules (see below);
- however if all plant on site up to the grid connection point are removed, then the installation will be considered “decommissioned” and its accreditation will be revoked; and
- there had been some concern that Ofgem might require replacement generating equipment to have the same installed capacity as the original equipment, which may not always be possible; for instance, if the rating of the turbine is no longer available. However, Ofgem’s Decision confirms that the installed capacity of an installation can increase or decrease (provided the maximum capacity for eligibility under the FiT scheme rules is not exceeded), albeit only the original accredited capacity will receive FiT payments.
FiT scheme rules
As noted above, replacing generating equipment will not, in itself, result in an installation’s accreditation being revoked, provided there is no breach of the scheme rules. Ofgem has updated its Guidance for Renewable Installations to include a list of scheme rules, namely:
- maximum capacity of 5MW (or 2kW for micro-CHP) is not exceeded;
- generating equipment has not been used at another installation that was previously accredited under the FiT or Renewable Obligation;
- accredited installation continues to generate electricity from the same eligible technology; and
- accredited installation is not decommissioned or relocated.
Ofgem’s Guidance explains that this is not an exhaustive list and that a modification to an installation may “interact with the legislation in an unforeseen way that does not fall under one of the currently identified scheme rules”. Ofgem recommends that FiT generators seek legal advice if they are unsure about whether their plans to modify their installation will affect its compliance with the legislation. In its Decision, Ofgem also reiterates it cannot give advice or comfort to FiT generators as to whether their planned modifications will be compliant.
If you are planning to replace your existing generating equipment and would like advice on whether your plans are compliant with the FiT scheme rules, please get in touch with Lorna Hewitt, Solicitor in our Energy and Commercial Contracts team, at lorna.hewitt@shepwedd.com, or your usual Shepherd and Wedderburn contact.