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Up to 70 per cent of Good Energy’s planned solar farms are at risk due to the government’s planned subsidy changes, according to the company’s boss.
Juliet Davenport stated plans being consulted on by the Department of Energy and Climate Change (Decc) to take large scale solar farms (above 5MW) out of the Renewable Obligation (RO) support mechanism could result in 60-70 per cent of her company’s portfolio, and hundreds of other solar farms, being put at risk.
Decc has proposed to close the RO for solar farms with a capacity of more than 5MW, which are connected to the grid from 1 April next year.
A grace period was proposed, which would allow developments that have made a “significant financial commitment” prior to 13 May this year, when Decc published its consultation, to still be eligible for RO support, provided it was connected to the grid before 13 May 2016.
Davenport said: “Under the current criteria they wouldn’t qualify and would therefore be at risk – but that doesn’t mean I won’t build them.”
She added that six of Good Energy’s sites, totalling up to 100MW, could be at risk, or at least delayed by around 12 months, if the government presses ahead with its plans.
Davenport said that the government should make “tweaks” to its plans to allow more sites to qualify for the grace period, such as allowing sites with arranged lease agreements and connection agreements, to be eligible for the RO support.
She also said that the amount spent per MW for a scheme to be eligible for the grace period should fall from £100,000 down to £25,000.
Davenport also stated that these plans could affect competition in the solar generation sector: “Potentially you’ll see consolidation and people who’ve got sites with planning selling them to somebody else who can consolidate that position.”
In the consultation, which closes on 7 July, Decc stated that “large-scale solar PV also has the potential to play a significant role” but warned that it is necessary to cut costs “to ensure it is affordable in the context of the RO and EMR”.
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