January 15 2018
On 14 December 2017, Ofgem published its "Draft Guidance for generators: Co-location of electricity storage facilities with renewable generation supported under the Renewables Obligation or Feed-in Tariff schemes" (the "Draft Guidance"). As Ofgem makes clear in its covering letter, the Draft Guidance does not introduce new policy, rather it is intended to provide further detail and clarification of how the installation of storage on existing accredited sites will be treated under the Renewables Obligation ("RO") and the Feed-in Tariff ("FiT") schemes (the "Schemes").
There is significant potential for the co-location of storage with existing renewables projects, which Ofgem defines as storage that is located with or linked to a renewables project where at least some of electricity produced by the renewables project is used to charge the storage device. However, storage is neither prohibited or expressly provided for in either of the Schemes' legislation. As a result, it has not been clear to developers and investors how such changes to existing projects would be treated. In March 2017, Ofgem updated its RO Guidance for Generators to provide further information in relation to the amendment of RO accreditations and the Smart Systems and Flexibility Plan published in Summer 2017 (summarised here) indicated that Ofgem would be publishing the Draft Guidance in relation to both Schemes.
The Draft Guidance emphasises that where the requirements of the Schemes continue to be met, storage can be deployed without impacting the relevant accreditation. Such co-located storage must meet the following key principles:
The Draft Guidance emphasises that developers of co-located storages sites must:
The RO case studies consider a range of co-location options considering a range of variables:
The Draft Guidance states that the developer of a co-located FiT installation must satisfy its ongoing metering requirements. In particular, it highlights that the FiT Scheme does not permit using multiple meters to measure any electricity imported to calculate net generation or export.
The FiT case studies consider a range of co-location options considering a range of variables:
Installation of co-located storage is a change to the generating station or installation that needs to be notified to Ofgem, or for smaller-scale FiT installations, the relevant FiT licensee. The Draft Guidance makes clear that generators will need to apply to amend their accreditation and provide additional evidence and information (such as single line diagrams) to ensure that the relevant authority is satisfied that the project is still eligible for support under the relevant Scheme. However, the Draft Guidance states that each project will be considered on a case-by-case basis and reiterates that Ofgem is unable to provide any assurance of proposed schemes prior to installation. Ofgem also notes a number of other points for developers and investors to consider, including that:
The Draft Guidance is open for stakeholder comment until 8 February 2018. The cover letter sets out a number of specific questions for stakeholders to consider and also seeks to ascertain the scale of the potential interest from those considering co-locating storage with renewable generation.
For further information on this topic please contact Robert Lane, Munir Hassan, Sarah King or Louise Dalton at CMS Cameron McKenna Nabarro Olswang LLP by telephone (+44 20 7367 3000) or email (firstname.lastname@example.org, email@example.com, firstname.lastname@example.org or email@example.com). The CMS Cameron McKenna Nabarro Olswang LLP website can be accessed at cms.law.
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