Will the neighbourhood get a windmill?
05 March 2020
With the Renewable Energy Support Scheme (RESS) auction scheduled to kick off this June, community projects have been given a special preference category as part of the auction design. The question remains, will this be enough to spark a change in how we develop, operate and own assets in the future? Community ownership of renewable assets is touted as a key part of our future energy system as we attempt to evolve our grid to a more decentralised model.
The auction design allows for three separate preference categories; community projects, solar and all projects. Each of these categories has been given a representative maximum quantity that can be awarded as set out in the draft Terms and Conditions. The allowable quantities for each category are:
- Community projects – 30GWh
- Solar projects – 300GWh
- All projects – 3,000GWh
Source: DCCAE and Cornwall Insight
A minimum size of 1MW has been set for all preference categories with the maximum size of a community-led project being capped at 5MW. This is significantly smaller than the allowable project size for solar, 125MW and for the all projects category of 600GWh/year.
Community-led projects that enter into the RESS auctions must meet specific requirements. If a project is eligible to enter as a community-led project there is scope for the project to enter into the community projects pot as a zero-bond project.
For community projects the ability to enter as a zero-bond project allows them to remove the burden of securing finance for these bonds or gathering equity from all the members of the community involved. The flip side of this is the government are also not willing to risk large sites failing to energise, so the project cap of 5MW is probably merited considering the lack of bonds to keep them honest.
Upon implementation, the EU Clean Energy Package will make all projects above 400kW MEC balancing responsible. For community projects which are likely to be small wind installations or solar farms, this will further complicate the operation of community-owned projects as in RESS they have to be in the 1 – 5 MW range.
30GWh will be offered up for community projects in the first RESS auction. Prospective developers have a range of issues to contend with, size constraints and new found imbalance risk being two. Some of the advantages in RESS will be around the lack of bonds securing their position in the auction. What is unclear is how these projects will be further incentivised as the level of support for community projects at present seems like a teaser so the hope would be that future auctions will have a larger pot for community-led projects!
Forum | AddRESSing Qualification | 23 March 2020
With the final RESS Qualification details due to be released on the 9 March and the inevitable slew of questions that will arise from the bundle of regulatory documents, we are providing this forum as part of our “Route to RESS” service. Our team of experts will examine documentation in advance of the forum, highlight the key criteria and areas of potential ambiguity to facilitate a focussed discussion, and ensure attendees leave with an in-depth understanding of the requirements for successful qualification.
Please click here to find out more, or contact Ruth Young at email@example.com to book.