Time to say grace? DECC sets out its proposals for RO grace periods
With the Renewables Obligation (RO) scheme of support for new schemes to be phased out by 31 March 2017 and the replacement Contracts for Difference scheme coming into effect next year, there will be a period of time in which developers will have a choice of which scheme to seek support under. For those that elect to seek support under the RO, generally speaking the facility must be commissioned and accredited by 31 March 2017, otherwise it will have to seek support under the Contracts for Difference scheme. However, the government has recognised that there may be some reasons outside the developer’s control that a project may be delayed beyond 31 March 2017 and so has issued a consultation on what grace periods will be available in such circumstances.
The government’s position is that, in general, operators of projects that have commissioning dates on or close to 31 March 2017 have the option of applying for a contract for difference, which would give them clear assurance of receiving support even if the project suffers unexpected delay. Because developers have known about this date for several years, the Department for Energy & Climate Change (DECC) remains minded to keep grace-period eligibility minimal.
It recognises that there are certain specific challenges that developers are experiencing at present, which it believes can best be addressed via more substantive grace periods, but proposes to target grace periods directly at those challenges, and where appropriate, rather than considering more extensive grace periods in general…
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