United Kingdom

United Kingdom

UK set to approve support grace period

UK: The 2015-16 Energy Bill setting out a 12-month grace period for onshore wind projects to complete and receive renewables obligation certificate (RO) has completed its parliamentary process.

The UK energy bill has completed the parliamentary process and is forwarded for royal assent
The UK energy bill has completed the parliamentary process and is forwarded for royal assent

The bill, introduced to the UK parliament in July 2015, outlines the closure of the RO support and identifies a 12-month grace period for projects affected by the change.

Having finished going back and forth between the two houses of the UK legislature, the bill will now go for royal assent, where approval is expected.

Projects that, as of 18 June 2015, had construction permission, a grid connection agreement and the land rights to a site will have until 31 March 2017 to be completed — 12 months longer than previously set.

Also included in the bill is a clause allowing a further nine months to projects wishing to receive support that had met the three conditions but found it difficult to secure investment.

Lenders had stopped supporting onshore wind projects due to the uncertainty caused by recent energy policy changes, including the earlier than expected closure of the RO mechanism.

Investor confidence in the UK has been hit so much that, according to Ernst & Young's latest renewable energy country attractiveness index (RECAI), the UK has fallen to 13th in the rankings. The rankings were released in early May 2016.

It is the lowest ranking of the UK since the index was started and follows the fall out of the top ten from eighth in September last year.

Developers able to prove they had been hampered in securing funding through banks' unwillingness to invest will be given until 31 December 2017 to complete their projects.

The law is part of a manifesto pledge by the ruling Conservative party in the 2015 UK general election.

Onshore projects will also be excluded from the next contracts for difference (CfD) auction set to take place by the end of 2016. CfDs were introduced to replace the RO system.

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