Energy Update: REFIT Deadlines – A Right to Extend?
02 May 2019
It is a requirement of the REFIT 2 terms and conditions that in order for projects to be eligible for support they must, amongst other conditions, satisfy the following requirements:
- Site substation works constructed and site energised or site substation works constructed and turbines/generating station delivered onsite (with evidence of same submitted to the Department) by 31 December 2019 (the First Connection Date), and
- REFIT Power Purchase Agreement (PPA) commenced on the basis of having at least 75% of installed capacity by 31 March 2020 (the March 2020 Deadline), in line with the provision for when the period of the PSO to be imposed shall commence as set out in 4(1G) of the 2002 Order as amended (the Second Connection Date)
Right to extend
There are two express mechanisms in the REFIT 2 terms and conditions that provide generally for the extensions of timelines, provided these extensions remain compliant with the State Aid Approval terms and conditions. These are detailed in Condition 9.6 and Condition 9.8 of REFIT 2.
The provisions for extension are intended to deal with issues which have arisen but which lie outside of the control of a support applicant,. The provisions, however, are not available to address circumstances where the applicant, through its own neglect or fault, has allowed issues to arise.
Condition 9.8 expressly makes provision for extensions of time for connections such that the:
“Minister may, even where no applications for extensions of time limits have been received, publish, in the event of a delay in grid connection build-out affecting, or likely to affect, a significant number of REFIT applicants or a category (which may be a category defined by type of project or by reference to some factor related to the likely impact of such a delay) of them, a notice extending, for all REFIT applicants or such a category, a specified deadline, or all deadlines, by a specified period of time or until a specified date within the conditions of the state aid clearance decision for this scheme.”
On 4 February 2019 the Minister for Communications, Climate Action and Environment declined IWEA’s request for an industry wide extension of the Second Connection Date to facilitate the connection of projects by the end of 2020, rather than March 2020.
Mason Hayes & Curran advised IWEA on the State Aid aspects of the extension. In our view, the extension of the Second Connection Date would not run counter to the State Aid Decision, provided that the connection of the project still takes place before the end of 2020. Therefore, we believe, the Minister has jurisdiction to grant extensions to the REFIT 2 connection date deadlines.
The Minister’s refusal to do so on an industry-wide basis does not, in and of itself, mean that individual projects cannot apply for an extension in accordance with the REFIT Terms and Conditions. If a project is at risk of missing the connection deadlines, it would be prudent to apply for an extension now.
Extension of time criteria
The REFIT terms and conditions are not prescriptive on the criteria that must be satisfied for an individual project to be granted an extension. However, Condition 9.6 requires that in respect of any extension the Minister must be satisfied that:
- The circumstances stated have occurred, and
- The reasons for the delay are outside the control of the applicant, and do not arise due to the fault or neglect of the applicant, its servants or agents, and
- The time extension sought is reasonable, and
- The obligation referred to can be reasonably shown to be achievable by the requested extended date.
Applicants should fully articulate a position which satisfies the above criteria. We recommend affected developer and stakeholders to take legal advice prior to making an application for an extension.
If an application for an extension were to be refused by the Minister, the reasons for any refusal would have to be considered carefully and may be open to challenge.
Any wind farm projects which may be in jeopardy of missing the REFIT 2 connection date deadlines should apply now for an extension to these deadlines, where the applicant is satisfied that the delays encountered were outside of their control. Any refusal by the Minister to an application for an extension should be carefully considered to determine whether it is amenable to legal challenge.
For more information on how this may affect your project, contact a member of our Energy, Utilities & Projects team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.