Following the announcement in September 2017 of Anesco’s retention of accreditation under the Renewables Obligation scheme for their Northampton solar site (which directly supplied storage batteries), Ofgem’s publication of draft guidance for retaining subsidies for renewable generation sites with co-located storage, has formalised the policy direction for the industry.
Ofgem’s historical issue was that no mention of battery storage facilities was made when the legislation underpinning the RO and FIT schemes was drafted and significant numbers of renewable generation site owners have been considering co-locating storage at existing sites to supplement the revenue streams available or to maximise the efficiency of existing streams.
With the majority of these sites having been accredited under the RO or FIT schemes, policy clarity was required to reassure not only owners and investors but to support the broader acknowledgement that deployment of storage is important to further the development of the decentralised, flexible smart grid.
Ofgem has taken the path of least resistance and stated that where the requirements of the RO/FIT schemes continue to be met with respect to a site, storage can be deployed without threatening the validity of the site accreditation.
Notice of the co-location of storage is required to be given to Ofgem by the site owner within 2 weeks of installation and they state there is no legislative procedure to enable owners to obtain assurance in advance that their proposed changes to co-locate will not impact on accreditation. Changes are only assessed on a case by case basis once they have been made – which is unhelpful given the changes may result in withdrawal of accreditation.
Key information required for Ofgem to assess the alteration include; an updated single line diagram for the site including details of the metering arrangements, information on how the meters can be used to calculate the net generation from the site and details of the way in which electricity generated by the site will be used. The guidance gives a number of examples showing acceptable metering set ups for both RO and FIT schemes.
The guidance provides four overarching principles which are applied in such assessments. Three of these relate to existing criteria (no change to a generator’s obligations or eligibility requirements under the relevant scheme, no change to the Total Installed Capacity of the site) and the other states generators can only receive support for eligible renewable electricity generated by the site (e.g. excluding any imported from the grid or from non-accredited generation).
Ofgem note that co-located storage will not comprise part of the generating station for the purposes of the RO/FIT schemes as ‘storage’ is not directly mentioned as an ‘eligible generating technology’ under either scheme. They also note (in most cases) the storage facility will not be essential to the generating station’s operation and metering arrangements need to ensure electricity from ineligible sources does not augment meter readings for the site.
Largely absent is mention of CfD supported sites with one exception. A single reference is made to dual scheme facilities in part accredited under the RO and in part supported under a CfD. Generators here are simply advised to ‘consider the requirements of both schemes’.
Note the issued guidance does not deal with the modified electricity generation licence for battery storage sites, nor the issue of double charging of consumption levies faced by storage sites. The Ofgem consultation on these issues closed on 27th November 2017, so we should see a response in Q1 2018.