Need for speed

Developers must prepare now or risk failing to commission before the ROC closure deadline.

Most readers of this article will be aware that the renewable energy sector in Northern Ireland is in a state of flux. As I write, the following DETI consultations are awaiting decisions:
1. The consultation published in March 2015 on the renewable obligation scheme (NIRO Scheme) closure grace periods and the proposed transition to the introduction of a Contracts for Difference Scheme (CfD Scheme). DETI is proposing, inter alia:
• A 12 month grace period to address radar and grid connection delays where the project was scheduled to commission on or before
31 March 2017. DETI confirmed this proposal in late August in relation to non-wind technology.
• A fixed price certificate scheme to be introduced in 2027 consistent to the Great Britain scheme being adopted in GB. So, for the last 10 years of the NIRO the price of ROCs will be fixed at the 2027 buyout price plus 10 per cent . DETI has confirmed this proposal in late August in relation to non-wind technology.
2. The Strategic Issues Decision Paper issued in March 2015 which was seeking views on, inter alia, the impact of removing the renewable electricity target and the possibility of not implementing the CfD Scheme in Northern Ireland and thereby not supporting new renewables projects at all post 2017.

In the meantime the all-island single electricity market is the process of being re-designed to facilitate the European Electricity Target Model which envisages the development of harmonised cross-border trading of wholesale electricity and balancing services across Europe and the creation of a single European Energy Market.

As time marches relentlessly on towards 31 March 2017 any developer wishing to sell or finance a renewable project based on the NIRO Scheme has no time to spare in getting their projects in order. From our experience in acting for funders and developers of renewable energy projects we have found that the following land and permitting issues are common to many projects and can give rise to transaction delays. We recommend that the following tasks are addressed as a priority:-
i) Reviewing the terms of the land option agreements to ensure that the options are still valid and to ensure that the options can be exercised in a timely manner to allow leases to be in place before financing/construction;
ii) Undertaking a review of the superior title of the landowners granting the leases to ensure that there are no impediments to the developments that need to be addressed, such as historical turbary rights or any sporting rights which may have been reserved over the lands. If the landowner has charged the lands, the bank’s consent should be sought at the earliest opportunity;
iii) Ensuring that all lease plans are prepared and are compliant with the terms of the lease and Land Registry requirements;
iv) Completing estimated revenue projections for calculation of stamp duty assessments on each lease to be granted;
v) Ensuring all pre development conditions contained within the planning permission(s) for the project are satisfied including any written agreement of discharge of the conditions by the DOE or local planning authority when required;
vi) procuring any further regulatory consents to permit the commencement of development of the project including excavation licences for archaeology, licences or consents with DRD Roads Service for any works to the highway which may be required as part of the project and consents relating to works to watercourses including culverting.

The renewable energy community in Northern Ireland urgently awaits the outcome of the DETI consultations on which many investment decisions rest. In the meantime, it is all hands to the pump to ensure that projects are commissioned before the 31 March 2017 deadline.

Neasa Quigley
Head of Energy
Carson McDowell LLP
Tel: 028 9034 8919
neasa.quigley@carson-mcdowell.com