With the Renewables Obligation Certificate (ROC) deadlines looming in 2016, Alf Scambler, Renewables Sector Manager for Aggreko, explains how Aggreko’s grid connection simulation technology can help wind and solar power developers speed up the race to beat critical 31st March deadlines and maximise revenue.
Early simulated grid commissioning could be the answer
The Aggreko team is working with renewable energy project developers and turbine manufacturers to accelerate testing and commissioning by using generators and loadbanks to simulate grid connection.
Aggreko enables project teams to fast track the commissioning phase and by replicating connection to the grid and demonstrating an ability to successfully produce power under load conditions.
By fast tracking the testing and commissioning process, Aggreko enables developers to export power and earn ROCs as soon as the grid connection goes live. The cost of temporary grid simulation technology can, therefore, be quickly offset from revenue that's released via early export of power. Grid simulation can also be used to support Feed-in Tariff (FIT) claims.
The race is on
The ROC scheme closes to new onshore wind projects a year earlier than previously planned on 31 March 2016, but those projects that have qualified for the early closure grace period will be able to accredit up to 31 March 2017. In some cases the grace period may be extended to 31 March 2018, where projects have been affected by grid or aviation delays.
For new solar PV plants of 5MW, the Renewables Obligation closes on 31 March 2016, but there is a grace period of 31 March 2017 for certain preliminary accredited projects. From 1 June 2016, those projects with an accreditation date after 22 July 2015 will receive a much reduced level of 0.8 ROC/MWh, while those projects that hadn't achieved the "significant financial commitment" criteria by 22 July 2015 will lose their right to 'grandfathering' and could, therefore, be subject to further reductions in tariffs over the 20 year lifetime.
There's therefore a very tight window of opportunity for wind and solar energy developers to gain accreditation for the Renewables Obligation and for solar projects to avoid reductions in ROC values. If projects don't successfully commission on time, they are at risk of missing the critical deadline and losing out on millions of pounds of revenue over the project lifetime.
More importantly, securing long-term ROC income mitigates project risk and avoids the uncertainty and potentially poorer financial returns of pursuing the alternative route of the Contract for Difference (CfD) auction.
Overcoming the challenges
The Aggreko team understands the challenges renewable energy developers face in achieving timely accreditation. DNOs are extremely busy, which creates a bottleneck in the grid connection process. Delays can also be caused by adverse weather conditions, problems with equipment delivery, or with testing and commissioning issues. By accelerating the commissioning process, project managers can lock-in earlier to ROC or FIT income and increase financial returns.
Taking control of the commissioning process, they can ensure the turbine manufacturers' commissioning engineers are not lost to other projects due to project delays. With commissioning completed, the developer can begin to export power as soon as the grid connection is completed.
This has an immediate return on investment because developers can earn ROCs or Feed in Tariffs from day one of the grid connection going live, rather than having to wait for the average two to three months commissioning period.
Developers who wish to take control of the construction and commissioning process and factor grid simulated early commissioning into their capital expenditure budgets should talk to Aggreko today.