Bhalindra Bath analyses DECC’s latest UK solar funding proposal from ROCs to CfDs

Bhalindra Bath, energy specialist at My Business Counsel, explores the latest proposal by the DECC, URD 14D/114, looking into the impact the proposal will have on developed 5+MW solar projects and options for developers if its passed.
 
BIRMINGHAM, U.K. - May 29, 2014 - PRLog -- Bhalindra Bath, My Business Counsel’s Energy specialist has written some articles on a new proposal by the Department of Energy and Climate Change (DECC). The proposal entails the UK government stepping in to control the risk of any potential overspend of their limited Levy Control Framework budget which subsidises private sector renewable energy electricity generation in Great Britain. Current Spending predictions suggest that the budget will not be able to keep pace with the rate at which 5+MW plants are being commissioned and accredited for receipt of renewable obligation certificates (ROCs) and so contracts for difference (CfDs) need to implemented sooner that originally expected to counter any potential budget drain, in 2015 rather than 2017.

Some developers may have to assess their long-term plans given their limited development finance budgets.

Larger developers that have already invested significant amounts and have fulfilled certain steps in the development process by 13.5.14, including obtaining planning consent for a prospective project, may be given a grace period that allows them to still build out ‘ROC-able’ plants.

The following three articles published on the My Business Counsel website offers a UK solar legal expert’s perspective on how this may affect the commercial legal elements of 5+MW solar facility development in Britain over the next 12-24 months:-

1)      An introduction

An analysis of URN 14D/114, along with what the proposal’s impact would have on 5+MW projects in Britain, and what the introduction of a CfD system will affect developers in the future:

“…

CURRENT SOLAR REGIME IN ENGLAND & WALES

At present, for the installation of a >5MW solar installation in the UK, a developer, contractor and what may loosely be referred to as “funder” [1], collaborate together on the development, installation, transfer, (“DIT”), or the development, installation, operation and maintenance, (“DIOM”), according to the following phases:

…”

http://www.mybusinesscounsel.com/solar-urn-14d-114-analys... (http://www.mybusinesscounsel.com/solar-urn-14d-114-analys...)

2)      What can solar Developers do next?

Explores what developers can do now that the proposal has been suggested, e.g. grandfathering of operational plants already accredited for ROCs is not included for pre-accredited plants post-1.4.15, so how will developers cope with the proposed changes under URD 14D/114?

“…

Developer possible next steps?

Contract relationships with main kit providers set up in framework supply agreements.

         “Contract relationships…Mechanise a CfD…Organise a development Pack…within a CfD, there is…Qualifying changes in law (“QCiLs”)…”

         …”

http://www.mybusinesscounsel.com/options-will-solar-devel... (http://www.mybusinesscounsel.com/options-will-solar-devel...)

3)      Grace period; time-limit for responses to URD 14D/114

Confirmation of by when the solar industry can respond to URD 14D/114. A grace period has also been offered to developers that have already met hefty criteria, highlighted in this piece:

“…

Confirmation of the last date for formal response to the British Government change to solar financial regime for 5+MW plants under Consultation.

“I’m developing a 5+MW plant but did not pre-accredit the related asset-SPV’s prospective facility for ROCs before 13.5.14 (the publication date of URD 14D/114) – how does the Grace Period (in URD 14D/114) operate in relation to my PV asset?”

…”

http://www.mybusinesscounsel.com/urd-14d114-deadline-set-... (http://www.mybusinesscounsel.com/urd-14d114-deadline-set-...)

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