Many renewable energy generators with accredited FIT installations are nervous about carrying out modifications to their projects including replacing equipment as part of the repair or maintenance of the project. Ofgem are routinely asked by FIT generators to comment on the potential effect that replacing generating equipment will have on their FIT accreditation.
Ofgem is now aiming to clarify its approach to the replacement of generating equipment at accredited FIT installations with the intention of making it more straightforward to carry out necessary repairs and maintenance. Ofgem recognises that the eligibility period for accredited FIT installations is often longer than the lifecycle of generating equipment. As the average age of accredited FIT installations increase, so does the probability that generating equipment will have to be replaced prematurely.
Ofgem propose that, when assessing changes to an eligible installation, Ofgem will take into account all plant forming part of the eligible installation, instead of only considering the generating equipment. Therefore, all parts of an installation up to the grid connection point would be regarded as being accredited, which Ofgem considers reduces the risk of generators losing their FIT accreditation if all the generating equipment needs to be replaced. The new guidance will expressly state that generators may repair or replace generating equipment without affecting the accreditation, provided that the installation continues to meet the scheme rules.
It's also important to note what is not changing. Firstly, any repair or replacement of individual components must still not alter the plant's generating capacity. This could be problematic for sectors like wind where original turbine models may no longer be available, and therefore a replacement could result in changes to generating capacity. There is no specific mention of replacement equipment that increases yield but not capacity. Secondly, there is a change to the Ofgem guidance only. The law remains unchanged and so there will always be a degree of residual risk associated with interpreting the modification rules under the FIT legislation. Ofgem will still assess modifications on a case by case basis.
Ofgem is hosting a stakeholder engagement event on 21 July 2021 at 11:00, details can be found here.
We would encourage you to make your views known to encourage as much clarity as possible.