DECC extends RO grace period
A further nine months for wind farms that meet certain conditions
DECC is to allow "struggling" onshore wind farms meeting the Renewables Obligation grace period criteria an extra nine months to connect to the grid.
The government said project developers who can meet the criteria and can “demonstrate that they have struggled to secure finance from lenders since 18 June”, the date it announced the RO would close a year early on 1 April 2016, “will be allowed extra time but no longer than nine months”.
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The extension will be introduced via an amendment to the Energy Bill, which is at the committee stage in the House of Lords. Wind farm developers have expressed concern that lenders will not finance projects until the Energy Bill is on the statute book.
The government will also table an amendment to extend the “approved development condition” for projects that had planning permission refused on or before 18 June, or where the relevant planning authority failed to determine a planning application where a decision was due by 18 June, and which are then subsequently granted consent at appeal.
DECC will extend the grace period to these projects on the grounds that had a correct or timely decision been made by the planning authority, such projects would have met the grace period criteria announced on 18 June.
DECC said a full copy of the amendments will be published on the parliament website.
Projects that qualify for the proposed early closure grace period will be able to accredit under the RO up to 31 March 2017, the original RO closure date.
Such projects will be able to accredit by 31 March 2018 under one of the existing grace periods for projects affected by a grid or aviation delay provided they also satisfy the eligibility criteria for at least one of those grace periods.
RenewableUK gave the amendments the thumbs-up. “This announcement means that wind farm companies can now go ahead and fully invest in local wind farm projects," said RUK deputy chief executive Maf Smith.
"It’s good to see that the government has acknowledged the financial uncertainty caused by these changes and the additional time offered will help rebuild investor certainty."
He added: "It’s important that industry works with government and parliament to ensure these amendments are incorporated and the Energy Bill gets on the statute books as soon as possible. It is only then that developers can deliver the level of new capacity the government wants to see by 2020."
Scottish Renewables was less keen.
"It is still our position that the UK government’s rationale for removing financial support for onshore wind was unjustified," said Scottish Renewables policy manager Michael Rieley.
“Many of our members will be bitterly disappointed that ministers are not going to allow projects which have submitted planning applications to be given a grace period,” he added.
DECC said the measure would provide certainty for investors while resulting in a net present value of £160m due to an expected reduction of 200MW wind build-out from the early closure of the RO.
The government estimates around 2.9GW of onshore wind capacity will be eligible for the grace periods, with up to 12.3GW of onshore wind capacity to be deployed by 2020.
Energy Minister Lord Bourne said: “We have a long-term plan to keep the lights on and our homes warm, power the economy with cleaner energy, and keep bills as low as possible for hard-working families and businesses.
“To do this we will help technologies stand on their own two feet, not encourage a reliance on public subsidies. By bringing forward these amendments we are protecting bill payers whilst meeting our renewable energy commitments.”
Image: the Little Cheyne Court wind farm in the UK (RWE)