Energy Law Update: REFIT Revisions
30 November 2015
Virtually all of Ireland’s onshore wind farms are, between them, supported by the three REFIT feed-in tariff schemes established by the Irish government and administered by the Irish energy regulator.
A recent clarification notice regarding applications under the REFIT Schemes will be of interest to REFIT applicants who are in the process of modifying their grid connections, or who encounter delays obtaining planning permission.
Separately there have been important changes to the REFIT 2 rules in respect of “connection” and “over-installation”.
The Rules of REFIT
The Irish government has established three REFIT feed-in tariff support schemes, which between them are intended to support approximately 4,700MW of renewable electricity generation.
The REFIT schemes have legal effect through references in the legislation that constitutes Ireland’s energy-related Public Service Obligation mechanism. However, in practical terms the rules of the REFIT schemes are set out in PDF documents that are maintained by the Department of Communications, Energy and Natural Resources (“DCENR”) on its website – click here.
These rules are occasionally amended by the DCENR without fanfare. This happened most recently in November 2015, and the changes are summarised below.
REFIT 2 and 3: Application Requirements Clarified
The rules of the REFIT 2 and REFIT 3 schemes require that applications for support be made by 31 December 2015, and that applicants submit as part of their application:
- a copy of full planning permission; and
- evidence of an offer or agreement, that will allow the project to connect to the electricity transmission or distribution system.
However, a clarification published by the DCENR in mid-November 2015 now allows applicants to submit the following, in place of the documents listed above:
- a letter from the relevant planning authority stating that the REFIT applicant has applied for planning permission and that this application is currently under consideration. This letter must include the original submission date for the planning permission; and
- where the project has a grid connection agreement, a letter from the transmission or distribution system operator stating that the project has made a “complete” application for the modification of the connection. This option appears to be intended to accommodate situations in which the “modification” is actually the transfer of grid capacity to the REFIT applicant from a third party, with the co-operation of the system operator, as well as modifications to connection agreements to merge, reduce or split maximum export capacities. A large number of these transactions are understood to be currently under discussion, as projects seek to optimise their grid connections.
The full planning permission and the connection offer/agreement must subsequently be submitted by 31 December 2016, otherwise the application is deemed to lapse.
REFIT applicants relying on this clarification should also note that their application will not be processed or eligible for rankings as per condition 10.4 of the REFIT Terms and Conditions and no letter of offer will issue until such time as full planning permission and evidence of a connection offer or agreement are submitted.
Other Changes to REFIT 2
Separately, on 16 November 2015 the DCENR introduced a slew of amendments to the rules of the REFIT 2 scheme. The substantive changes are:
- it has been made clear that the deadline for project “connection” requires that both (A) the site substation must be completed and the site energised or turbines delivered onsite by 31 December 2017; and (B) the REFIT-supported power purchase agreement must commence on the basis of at least 75% installed capacity by 30 September 2018. Previously it had appeared that a project could achieve “connection” by satisfying either limb (A) or limb (B)
- language has been added to the REFIT 2 rules in relation to an amendment made in 2014 to the Commission for Energy Regulation’s Connection Offer Policy and Process (“COPP”). The COPP amendment increased the “over-installation” that wind farms may carry out. This REFIT 2 amendment accommodates the change to the COPP, but imposes a number of conditions that must be observed where an affected project is receiving REFIT support.
As the end of the application window for the REFIT 2 and 3 schemes approaches, and Irish renewable projects look to assemble the necessary REFIT application documents, the clarification of the application rules is something that applicants will welcome, particularly given the recent delays to planning permissions as a result of the O’Grianna decision and the increased volume of grid modifications that are currently being processed by ESB Networks and EirGrid.
On the other hand, the connection-related amendments to the REFIT 2 scheme do appear to slightly raise the hurdles that qualifying projects will need to overcome in order to eventually enjoy REFIT support. It goes without saying that the rules changes should therefore be reviewed carefully against the construction timetables of applicant projects, and appropriate advice sought.
At a practical level, interested parties should continue to consult the DCENR’s REFIT web page, in order to maintain current and complete copies of all relevant REFIT documentation.
For more information, please contact our Energy, Utilities and Projects team.
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