THOUGHT LEADERSHIP Taylor Wessing

UK legislative framework
for renewable energy
2015 Update

Dominic FitzPatrick
Partner, Head of Energy (UK)
Taylor Wessing

Last year’s article for Clean Energy UK Finance Guide 2014 set out a comprehensive review
of the regulatory framework for renewable energy in the UK including summaries of the
main support mechanisms. That article is available at http://bit.ly/1tquDvY. This article
supplements and updates last year’s article by summarising the principal legal developments
since that article was written.

Renewables Obligation (“RO”)
Transition Period
The RO moved into the “transition period” on the
commencement of the Contracts for Difference (“CfD”)
scheme in October 2014. This period will last until the RO
is closed to new generation capacity on 31 March 2017.
Amendments were made to the Renewables Obligation
Order to reflect this transition.
Choice of Scheme
Under the transition arrangements, generators in England,
Wales and Scotland have a one off “choice of scheme”
between the RO and the CfD scheme. Once an application
for accreditation is made for a CfD an application cannot be
made for accreditation of the same generating station under
the RO, unless or until the application for the CfD is rejected.
Similarly, if an investment contract has been entered into
under the FID Enabling Programme for the same generation
station, then the station is ineligible to apply under the RO
unless or until the investment contract is terminated for a
“permissible termination event” (i.e. events relating to delay
or refusal of approval for a CfD or conditions attached by the
EU or amendments proposed by the Secretary of State).
An application for preliminary accreditation under the RO
does not constitute a choice of scheme.
Degression
The RO banding and degression remains unchanged from
the degression rates introduced on 1 April 2013 following
the 2012 banding review. The rates for the previous and
remaining obligation periods in the transition period are set
out last year’s article for this publication.
These rates will be reviewed at four year intervals (the next
schedule review being due in 2017) but remain subject to
emergency review in a number of circumstances, including
changes to other support schemes, introduction of new
technologies capable of being deployed on a large scale
and significant variations in net costs of any technology
changing the economic case for support.

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Taylor Wessing THOUGHT LEADERSHIP

Closure of RO to Solar >5MW

Cumulative solar photovoltaics
Solar PV capacity accredited under the RO increased 250% in deployment
the calendar year 2014. 2010 to 2015
Feed in Tariffs Renewables Obligation Other
eligible accredited Solar
The substantial increase in the rate of deployment of solar
PV in the UK raised concerns about the impact upon limits 7
imposed by the Levy Control Framework on support for
6
renewables. After a number of consultations in 2014, on 1

Installed Capacity (GW)

April 2015 the RO was closed to new solar PV generating 5
stations having a total installed capacity (TIC) above
5MW and to additional capacity added to existing stations 4

resulting in a TIC of more than 5MW. 3

“Three grace periods were introduced, 2

1
allowing the possibility of RO accreditation
0
of solar generating stations above 5MW if the 2010 2011 2012 2013 2014 2015

relevant criteria are met and the station is Source: S

 olar Photovoltaics Deployment, Department of Energy and Climate Change
29 May 2015
commissioned on or before 31 March 2016.

”
Solar PV stations that have been accredited under the RO and
add new capacity resulting in the TIC exceeding 5MW, can
apply for support under the CfD for the capacity above 5MW
(known as “excluded capacity”) provided that the capacity is
separated and separately metered. A station that is accredited
for part of its capacity under the RO and part of its capacity
under the CfD scheme is known as a “dual scheme facility”.
Grace Periods
Three grace periods were introduced, allowing the
possibility of RO accreditation of solar generating stations
above 5MW if the relevant criteria are met and the station
is commissioned on or before 31 March 2016. These are the
“significant investment”, “grid delay” and “preliminary
accreditation” grace periods.
The significant investment grace period allows accreditation
of solar PV stations of more than 5MW if it can be
demonstrated that, on 13 May 2014:
1. an application had been made for planning permission,
2. an accepted grid connection offer existed for grid works
for the connection of the station; and
3. the operator of the station declares that a developer
or a person connected with the developer held one
of the specified interests in the land or an exclusivity
agreement with the owner or lessee of the land relating
to the development of the solar PV generating station.
The grid delay grace period allows accreditation of solar
PV stations of more than 5MW if it can be demonstrated
that:
1. an accepted grid connection offer existed for grid works
for the connection of the station;
2. the estimated or planned date for completion of the
grid works (as stated by the relevant network operator)
was no later than 31 March 2015;
3. the relevant network operator confirms that the
relevant grid works were completed after the planned
completion date and in its opinion the failure to
complete the works by that date was not due to any
breach by the developer of any agreement with the
relevant network operator; and
4. the operator of the station declares that to the best of
their knowledge and belief the station would have
been commissioned not later than 31 March 2015 if the
relevant connection works had been completed on or
before the planned date.
Where preliminary accreditation had been granted, no
further evidence is required to be submitted other than
evidence of commissioning.
In all cases applicants must submit evidence of
commissioning.

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THOUGHT LEADERSHIP
CHP Uplift
Prior to 1 April 2015, qualifying combined heat and power
(CHP) stations could claim additional support under the RO
for heat produced (the “CHP Uplift”). From 1 April 2015, new
generating stations and existing stations adding capacity
can no longer claim the CHP Uplift under the RO but may
instead claim support under the Renewable Heat Incentive
(“RHI”). There is an exception where the technology or fuel
source is ineligible under the RHI.
A new Renewables Obligation Order
DECC published a draft Renewables Obligation Order 2015
in a technical consultation that ended in April 2015. This
consolidates the existing Renewables Obligation Order and
amendment Orders and adds new provisions dealing with
interaction with the Capacity Market and provides for the
introduction of mandatory sustainability provisions from
1 October 2015 for stations of 1MW and above using solid
and gaseous biomass feedstocks. These include:
• the introduction of land criteria for woody biomass,
which requires feedstocks to have been obtained
from a sustainable source (supplementing existing
sustainability criteria);
• the establishment of a greenhouse gas (GHG) target
trajectory and GHG averaging methodology;
• providing for a reduction of CO2eq/MWh for Dedicated
Biomass and Conversions & Co-firing to 200kg CO2eq/
MWh from April 2020 and 180kg CO2eq/MWh from
April 2025; and
• a requirement for generators of 1MW and above to
produce independent audit reports relating to their
compliance with sustainability criteria.
Degression bands for new solar PV installations from 1 January 2015
Aggregate Declared Net Capacity of all Degression Aggregate Declared Net Capacity of all other
other than stand-alone solar photovoltaic rate than stand-alone solar photovoltaic installations
installations with a Declared Net Capacity
of 10kW or less deployed in the previous
quarter
Not more than 100MW nil*
More than 100MW but not more than 200MW 3.5%
More than 200MW but not more than 250MW 7.0%
More than 250MW but not more than 300MW 14.0%
More than 300MW 28.0%
Not more than 32.5MW nil*
More than 32.5MW but not more than 65MW 3.5%
More than 65MW but not more than 97.5MW 7.0%
More than 97.5MW but not more than 130MW 14.0%
More than 130MW 28.0%
* Degression can only be zero for two quarters in a row.
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Taylor Wessing
FEED IN TARIFFS (FITS)
To date, deployment of commercial and industrial scale
building-mounted solar PV has been below levels in
other European countries. The Government’s Solar PV
Strategy published in April 2014 has a policy objective
to increase this deployment. DECC also seeks to increase
the participation of communities in renewable energy
generation.
“As a result of high deployment rates, the
maximum degression of 28% will apply to
stand alone PV with effect from 1 July 2015.
In 2015, a number of adjustments to the FiT scheme were
”
introduced in order to increase the deployment of building
mounted solar PV and to facilitate community participation
in FiT generation.
Building mounted solar PV
Split in solar degression bands
The degression banding that previously applied to solar PV
installations of more than 50kW has been split into separate
“>50kW other than stand alone” and “stand alone” bands
with effect from 1 January 2015. Degression bands for new
solar PV installations from 1 January 2015 are set out below.
As a result of high deployment rates, the maximum
degression of 28% will apply to stand alone PV with effect
from 1 July 2015.
Other than stand-alone installations >250kW
In the Government’s response to the further consultation
on the changes to financial support for solar PV published
Degression
rate
with a Declared Net Capacity of more than 10kW
but not more than 50kW deployed in the previous
quarter
Not more than 50MW nil*
More than 50MW but not more than 100MW 3.5%
More than 100MW but not more than 150MW 7.0%
More than 150MW but not more than 200MW 14.0%
More than 200MW 28.0%
Not more than 17.5MW nil*
More than 17.5MW but not more than 35MW 3.5%
More than 35MW but not more than 52.5MW 7.0%
More than 52.5MW but not more than 70MW 14.0%
More than 70MW 28.0%
Taylor Wessing
on 5 November 2014, DECC announced that the definition
of “Other than stand-alone installations” for installations
above 250kW will change to include a requirement for a
minimum on site usage of electricity produced from the
installation of 10% of the declared net capacity (DNC) of
the FiT installation. FiT generators of such plant will need
to demonstrate that there is sufficient plant on site to be
capable of drawing a load of at least 10% of the DNC at time
of low power generation.
“The FiT scheme now includes a number of
provisions intended to promote community
energy installations.
Transferability of building-mounted solar PV installations
” Community Energy Installations
In the Government response to the consultation on the
transferability of building-mounted solar PV installations
dated 20 March 2015, DECC confirmed that it will introduce
secondary legislation in 2015 to modify the FiT scheme
so that building mounted solar PV of >50Kw may be
transferred from its installed location subject to a number
of conditions (some of which were modified following the
consultation).
These are:
1. The installation must continue to be classed as “other-
than-stand-alone”.
2. Transfers would only be allowed for installations
whose eligibility date is on or after the date the
legislation comes into force.
3. An installation would not be able to transfer location
in the first 4 years that it is entitled to FIT payments.
4. Payments will not be made during the transfer and
there will be no extension to the facility’s entitled FIT
payments period to compensate for this.
5. Where the installation formed part of the compliance
with new build energy performance requirements of
the building it was originally attached to the transfer
will not be allowed.
6. The owner of the transferring solar PV installation
will be liable to pay for a new energy performance
certificate for the building they are removing it from
that shows the energy rating of the building without
the PV installation, excluding instances where the
building is to be demolished or where the panels have
been removed for remodelling.
7. The owner of the transferring solar PV installation
must inform the local planning authority of their
intention to transfer and must carefully consider if the
removal of the installation could breach a condition or
limitation, subject to which planning permission has
been granted.
THOUGHT LEADERSHIP
The FiT scheme now includes a number of provisions
intended to promote community energy installations.
Community energy and school installations already benefit
from less stringent energy efficiency requirements than other
generators (EPC level of G or above rather than D or above).
The Feed-in Tariffs (Amendment) Order 2015 introduced
changes to the definition of “community organisations”,
extended the period of validity of preliminary accreditation
of a community organisation and provided that the sharing
of a grid connection with another project by a community
organisation would not determine the extent of the Site (and
therefore would be disregarded determining the eligibility of
the installation under the FiT scheme).
Definition of “community organisation”
Community interest companies and subsidiaries of
charities have been added to the definition of community
organisations (which previously included charities,
community benefit and co-operative societies only). This
is intended to give greater flexibility to the legal structure
of the community participation. The eligible organisations
(and in the case of a subsidiary of a charity, the subsidiary
and the parent charity) must have 50 or fewer employees.
Validity of preliminary accreditation
The validity of preliminary accreditation given to
an installation that will be owned by a community
organisation is increased by 6 months. Therefore the
validity periods are: solar PV - 2 months; wind and
anaerobic digestion - 18 months; and hydro - 30 months,
each beginning with the date on which the application for
preliminary accreditation was received by the Authority.
Shared Grid connection
Eligible installations on the same site using the same
technology are treated as a single installation under the FiT
scheme. Although there is no statutory definition of “site”
for these purposes, OFGEM’s guidance states that the meter
point administration number (MPAN) (i.e. grid connection)
is a determinative factor. Installations that share a single
grid connection are therefore likely to be considered as a
single installation. By virtue of the 2015 Amendment Order
the MPAN shall not be taken into account in determining
the extent of the Site where at least one of the installations
is owned by a community organisation.
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THOUGHT LEADERSHIP Taylor Wessing

Climate Change Levy Renewable Heat Incentive

Current CCL rates are set out below: The RHI is funded directly from general taxation. Although
it does not fall under the Levy Control Framework, the
Commodity Rate from Rate from Reduced rate Treasury has assigned annual budget limits to the RHI until
1 April 2016 1 April 2015 of CCL for 2016. These limits allowed £424 million expenditure in
CCA holders 2014/15, and allow for £430 million expenditure for 2015/16.
The Government has introduced set tariffs for certain
Electricity 0.559 pence 0.554 pence From 10% technologies and the degression mechanism to ensure the
per kWh per kWh RHI scheme stays within these financial limits.

Gas supplied 0.195 pence 0.193 pence From 35% DECC calculates anticipated spend by using data based on
by a gas utility per kWh per kWh applications received by Ofgem and installations already
or any gas participating in the scheme to establish how much it is
supplied in a committed to spend over the next 12 months. The 12-month
gaseous state period moves forward every quarter with the previous
that is of a assessment date as its starting point. Monthly reports are
kind supplied also produced.
by a gas utility
DECC has announced there will be a 15% reduction to the
Any petroleum 1.251 pence 1.240 pence From 35%
small commercial biomass tariff for non-domestic RHI for
gas, or other per kg per kg
the quarterly period starting 1 April 2015. The uptake of
gaseous
ground source heat pumps and solar thermal panels has
hydrocarbon,
been much smaller than anticipated, therefore it is unlikely
supplied in a
these other technologies will be at risk of degression. DECC
liquid state
also announced that there would be a 20% reduction in
Any other 1.526 pence 1.512 pence From 35% the biomass tariff for domestic RHI for the quarterly period
taxable per kg per kg starting 1 April 2015, from 10.98p to 8.93p.
commodity
The Government has committed to the concept of
‘grandfathering’ the RHI, in order to provide certainty
Road Transport Fuel Obligation (“RTFO”) to those investing in renewable heat installations about
the level of support they will receive. This means that
The Renewable Transport Fuel Obligations Order 2007 was any changes to tariff levels will only affect new projects
amended by the Renewable Transport Fuel Obligations accredited on or after the date that new tariff levels are
(Amendment) Order 2015 with effect from 15 April 2015. implemented.

The 2007 Order previously provided for one renewable

transport fuel certificate (RTFC) to be issued for each
kilogram of gaseous renewable fuel or litre of liquid
renewable transport fuel. The 2015 Order provides that
each kilogram of biomethane will receive 1.9 RTFCs, and
each kilogram of biopropane or biobutane will receive 1.75
RTFCs, reflecting the higher energy content of those fuels .
The amendment brings the treatment of hydrotreated
vegetable oil (HVO) and fatty acid methyl ester (FAME) into
line, as well as clarifying the Department of Transport’s
administrative powers.
Levy Control Framework
In November 2012 DECC announced an upper limit of £7.6
billion (in 2011 to 2012 prices) on spending until 2020-21 for
the combined cost of RO, FiTs and Contracts for Difference.
Capacity market expenditure will be paid for through the
LCF, but it will be in addition to the £7.6 billion LCF upper
limit. From DECC’s projections, it appears that around £6.7
billion has already been allocated to renewables support
outside the CfD mechanism, thus constraining the funding
capacity available for CfDs.
Taylor Wessing THOUGHT LEADERSHIP

ELECTRICITY MARKET REFORM Structure of the first round of auctions

The terms of the CfDs for the first auction round were
Contracts for Difference published by DECC in August 2014.

Introduction Applicants submitted their sealed bids for CfDs to DECC in

CfDs are intended to guarantee a “strike price” for successful early February 2015, and DECC then selected the cheapest
bidders over a period of 15 years of electricity generation. bids, up to the budget limit.
Further details of the mechanism are set out in last’s years
article. All successful bids were awarded a CfD at the “clearing strike
price”, being the price offered by the most expensive bid in
On 26 February 2015, the first auction round for CfDs were each technology pot. The clearing strike price cannot exceed
published by DECC, with 27 projects totalling over 2GW the relevant administrative strike price, which was set by
successfully securing a CfD. The CfDs allocated in the first the Government in December 2013.
round are worth £315 million.
Pricing ranges were:
The Competition and Markets Authority (“CMA”) has been
conducting an investigation into CfDs as part of a wider 2016-17 2017-18 2018-19
review of the Energy Market Reform, with concerns that the
auction process may be restricting competition in the UK Advanced conversion tech £119.89 £114.39
electricity generator market. Energy from waste with CHP £80.00

Allocation of technologies to pots Offshore wind £119.89 £114.39

DECC announced in mid-2014 that technologies would be Onshore wind £79.23 £79.99 £82.50
divided amongst three separate “pots” for the purposes of
allocating CfDs. The pots were organised as follows: Solar PV £79.23 £50.00

• Pot 1 - established technologies, including onshore

wind (>50 MW), solar PV (>5 MW), hydro (between Allocated CfDs according to technology
5 MW and 50 MW), EfW with CHP, landfill gas and
sewage gas; Onshore Solar Offshore Advanced conversion EfW with
wind PV wind technologies CHP

• Pot 2 - less established technologies, including offshore 1,200

wind, wave, tidal stream, advanced conversion

Total commitment of projects

1,000
technologies, anaerobic digestion, dedicated biomass
allocated a CfD (MW)

with CHP, and geothermal; and

800

• Pot 3 - biomass conversion.

600

In January 2015, Pot 1 was allocated £50 million for 400

projects commissioning from 2015/16, and an additional
£15 million (£65 million in total) for projects commissioning 200
from 2016/17 onwards. Pot 2 was allocated £155 million
for projects commissioning from 2016/17 onwards, and an 0
2015-2016 2016-2017 2017-2018 2018-2019
additional £105 million (£260 million in total) for projects
commissioning from 2017/18 onwards. The difference in Delivery year
budget allocation between Pots 1 and 2 was intended to Source: DECC
incentivise the development of these “less established”
technologies of Pot 2, making them more competitive with
those in Pot 1. No budget was released in the first auction
round for Pot 3 in 2015.
THOUGHT LEADERSHIP
Wind generators secured the majority of the CfDs available
in round one, with 17 onshore and two offshore projects
successful. The two offshore projects are to deliver a
combined 1162 MW, while onshore projects will deliver
749 MW in total. Solar PV projects had only five successful
bids of the 27 CfDs allocated, two of which were not taken
up.
Post-auction
Following the close of the first auction and execution of
CfDs, successful applicants may enter into the Offtaker
of Last Resort (“OLR”) scheme. This scheme is aimed at
providing an alternative route to market for electricity
generated by parties to CfDs, where a normal power
purchase agreement cannot be entered into by normal
commercial means. Suppliers may access the OLR scheme
via auction, submitting a contract management fee bid to
Ofgem. Ofgem also appoints mandatory suppliers for each
OLR year, which must take part in the auction process.
If successful, the supplier enters into a backstop power
purchase agreement with a CfD generator, which allows
for the generator’s electricity to be sold to the supplier
at a specified discount to the market price. The OLR will
open to eligible generators on 1 October 2015. The process
from application to commencement of a backstop power
purchase agreement is expected to take at least 26 days.
“
CfDs were over-subscribed in the first auction
round, with 27% of applicants successful in
their bids.
”
Non-delivery
The Government has implemented its non-delivery
disincentive exemptions policy (the “NDD”) through
the Contracts for Difference (Allocation) (Amendment)
Regulations 2015 (the “Regulations”). The Regulations
define an “excluded site” as the area on which the
generating station is (or was intended to be) situated, as
per the CfD application. Subject to the certain exemptions,
developers will be unable to bid for a new CfD for 13
months for any project site where the generating station
would overlap with the excluded site. For non-signature
cases, the 13 month period begins from the date on which
a CfD was originally offered. For non-delivering cases, the
period begins 13 months from the date of termination of
the CfD.
Following the announcement of the auctioned CfD
allocations, the developers of the two 2015-2016 solar PV
projects refused to take up their CfDs. Developers will
be unable to reapply for CfDs for a period of 13 months
for the generating areas of these projects. The LCCC has
published an excluded sites register stating that exclusions
apply to these sites until 25 March 2016. Exemptions to
the exclusion may be available upon application to the
Secretary of State under certain grounds, as implemented
by the Regulations as regulation 14B of the Contracts for
Difference (Allocation) Regulations 2014.
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Taylor Wessing
Future allocations of CfDs
CfDs were over-subscribed in the first auction round, with
27% of applicants successful in their bids. It is unknown how
much of the unallocated LCF budget will be available in any
future round of CfD auctions. Tidal, Nuclear and CCS projects
may also be included in any future allocations.
Despite DECC not disclosing any details on unsuccessful
bidders or the strike prices submitted in the first auction
round, the results provide some clarity and guidance for
developers bidding in future CfD auctions. DECC currently
plans for the next allocation to take place in October 2015.
An operational plan was published in March 2015 setting
out the anticipated process for this second auction round.
Other developments
DECC is currently carrying out a consultation on changes to
the terms of CfDs. The proposed amendments focus on:
i. bespoke terms and conditions for projects developed
by unincorporated joint ventures;
ii. disincentivising generators to generate electricity at
negative prices; and
iii. other minor changes to the terms and conditions.
The public were invited to respond by 20 April 2015. No
response had been published by the Government at the
time of writing.
Investigation of the CfD process by the CMA
On 26 June 2014, the CMA received a reference by Ofgem
raising concerns around CfDs and the Capacity Market. The
CMA published its initial view on 2 March 2015. It noted
that the division of projects into pots is a risk to competition.
Projects from one pot may be displaced by a more expensive
project in another pot, meaning CfDs may not be allocated
to the most efficient projects or at the lowest possible cost to
consumers. The statutory deadline for the CMA to provide
its findings is 25 December 2015. If the investigation
reveals that these mechanisms have an adverse effect on
competition in the UK energy market, then the CMA may
use any of its wide range of powers and remedies to prevent
any future anti-competitive effect.
Capacity Market
The Capacity Market, which was launched last year,
provides regular, set payments to capacity providers in
return for which capacity providers must deliver energy
when needed (or reduce demand when the system is in
stress), or face penalties.
DECC make a forecasts of future peak demand four years
ahead of the delivery year in which it is needed, and, if
there is a risk of a shortfall in capacity required, an auction
is held to contract for the capacity required to meet the
demand. Capacity suppliers submit bids and the market
clears at the price that balances supply and demand.
Under a pay-as-clear auction all parties are paid the market
Taylor Wessing
clearing price set by the marginal bid into the auction (set
by the most expensive successful bidder). Successful bidders
at the auctions will be offered capacity agreements four
years ahead of the year in which capacity must be delivered
(and also, in some instances, one year ahead), in both
existing and new capacity terms. This also gives investors
certainty over their future revenues.
Eligibility and pre-qualification
In comparison to the RO, FIT and CfDs, the Capacity
Market is technology neutral. Capacity providers therefore
participate on the basis of ‘Capacity Market Units’ (“CMUs”).
Plant are compared in capacity auctions on the level of their
auction bids, and there is no requirement for certain plant
characteristics.
THOUGHT LEADERSHIP
The following forms of capacity are eligible to participate in
the Capacity Market:
• new and existing generation capacity (including
combined heat and power (CHP));
• demand side response (DSR), including embedded
generation;
• electricity storage; and
• interconnected non-GB capacity, including the
interconnectors themselves (which were only made
eligible in December 2014. This form of capacity can
begin participating in the second four-year ahead
auction).
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THOUGHT LEADERSHIP Taylor Wessing

However, the forms of capacity set out below are not eligible
to participate in the Capacity Market:
Taylor Wessing
• capacity which is already receiving support through Website: www.taylorwessing.com
the RO, small-scale FiT, CfDs, RHI, New Entrants Contact: Dominic FitzPatrick
Reserve 300 (NER300), or plants that are fitted with Position: Partner, Head of Energy (UK)
Carbon Capture and Storage (CCS) and in receipt of a Email: d.fitzpatrick@taylorwessing.com
CfD (however CCS which is not in receipt of a CfD is Telephone: +44 (0)20 7300 4689
eligible to participate);
Taylor Wessing is a leading international law firm
• applicants who currently hold long-term contracts with more than 1,000 lawyers across Europe, the
to provide Short-Term Operating Reserve (STOR) (and Middle East and Asia. We work with clients in the
who do not declare to terminate their STOR contracts if world’s most dynamic industries including most
awarded a capacity agreement); and notably Technology, Media and Communications,
Life Sciences, Private Wealth, and Energy.
• capacity below a de-minimis threshold of 2MW can only
participate when combined with another capacity. We have a long-standing international Energy
group comprising more than 60 lawyers. Our
The first round of auctions renewable energy practice advised on some of
On 1 August 2014 the Secretary of State announced that Europe’s earliest wind-farms and continues to be
the first four-year ahead auction (T-4) would take place in an active player in the wider renewables field.
December 2014 for the years 2018/19. The auction parameters
which include the amount of capacity to be procured were We advise on investment in, and the development
also confirmed at this time. and financing of, renewable and alternative
projects from many different renewable energy
The results for the December 2014 T-4 auction were published and alternative fuel sources.
on 2 January 2015. The Delivery Body allocated 48.6GW of
We act for clients providing a variety of services
capacity to guarantee supplies for the winter of 2018/2019.
to the sector – from energy companies and project
Bidders ranged from large to small generators and included
developers to suppliers, and from banks to strategic
both established and emerging players in the market.
investors (both corporate and private). We are able
to bring together specialist lawyers with extensive
The auction began bidding at £70-75/kW and the price
international experience from key strengths of the
dropped by £5 each round until there were enough bids to
firm in project finance, corporate and commercial
meet the target capacity (at which point the auction ‘cleared’).
law, planning and environment, banking, project
On this occasion, the price set was £19.40/kW.
development, mergers and acquisitions, real estate,
construction and engineering, tax and intellectual
A further one-year ahead auction will be held in late 2017 to
property.
contract a further 2.5GW of capacity for delivery in 2018/2019.
For this auction, all capacity will need to be available from
October 2018 for one year. Further auctions for the four-year
ahead contracts will be held on a rolling basis with two
transitional auctions being held in 2015 and 2016 for demand
side capacity. These additional intermediary auctions will
enable the Government to fine-tune the amount of capacity
it procures. ◼

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