GUIDANCE: INSTALLED CAPACITY & FINAL INSTALLED CAPACITY Version 1

Transcription

1 GUIDANCE: INSTALLED CAPACITY & FINAL INSTALLED CAPACITY Version 1

2 Contents 1. Introduction 3 2. Installed Capacity 3 3. Final Installed Capacity 5 Low Carbon Contracts Company Ltd Guidance: Installed Capacity & Final Installed Capacity, June

3 1. Introduction 1.1 This guidance has been prepared by Low Carbon Contracts Company Ltd ("LCCC") to support Generators in delivering the requirements of the Contract for Difference ( CFD ), specifically in relation to the provisions regarding the Installed Capacity and the Final Installed Capacity. The Conditions of the CFD which are of relevance to this guidance include the definition of Installed Capacity and Condition 7 (Final Installed Capacity; Maximum Contract Capacity) of the CFD. 1.2 This guidance does not and is not intended to supersede or replace the provisions of the CFD. Readers should not place reliance upon this guidance and should refer to the CFD. This guidance does not constitute legal or investment advice and should not be relied upon as such. Generators should consult their professional advisors where they require advice whether legal or otherwise on the application of the CFD. This guidance is subject to change. 1.3 Defined terms used in this guidance and not defined herein should be given the meaning provided in the CFD (which is comprised of the CFD Agreement (being the front section) and the FIT Contract for Difference Standard Terms and Conditions as published by the Department of Energy & Climate Change on 29 August 2014 ( Conditions )). 2. Installed Capacity 2.1. Installed Capacity is defined in the CFD as: the capacity of the Facility (expressed in MW) were it to be operated on a continual basis at the maximum capacity possible without causing damage to it (assuming any source of power used by it to generate electricity was available to it without interruption) 2.2. Facility is defined in the CFD as including all assets which are used (or intended to be used) to generate or deliver electricity As the definition of Installed Capacity states that the Facility must be operated on a continual basis, this means that the capacity of all equipment/assets of the Facility which are necessary for the continuous generation of electricity should be included in the determination of the Installed Capacity, taking into consideration their positive or negative contribution towards the generation of electricity. The Installed Capacity can be therefore described as a gross-net capacity and thus any electrical load without which the Facility would not be able to continuously generate should Low Carbon Contracts Company Ltd Guidance: Installed Capacity & Final Installed Capacity, June

4 be deducted when determining the Installed Capacity The electrical loads that should be deducted when determining the Installed Capacity include: a) any parasitic electrical load using electricity generated by the Facility and used by the Facility equipment in order for the Facility to continuously generate for a sustained period of time. b) any electrical load of equipment using electricity (regardless of whether or not it is being generated by the Facility) for handling and preparing fuel that is necessary in order for the Facility to continuously generate for a sustained period of time 2.5. Note that site electrical loads (being electrical loads required by equipment which is used for handling or preparing a material/substance which is not necessary in order for the Facility to generate continuously for a sustained period) should not be deducted when determining the Installed Capacity provided that these site electrical loads are separately metered. Example on electrical loads The electrical load of conveyor belts used to deliver a fuel to equipment for generating electricity should be deducted when determining the Installed Capacity if it is necessary in order for the Facility to continuously generate electricity for a sustained period. The electrical load of equipment separately metered and used to segregate any recyclable material from fuel should not be deducted when determining the Installed Capacity if the Facility could have been preparing and stacking this material in advance without the need to continuously do so for the Facility to continuously generate electricity for a sustained period of time For PV technology, the Installed Capacity must be rated in MW of AC power (MW AC ), not MW of DC power (MW p ), as it this capacity rating that forms the basis of the MWh output of the Facility All references to Installed Capacity, including the Installed Capacity Estimate (as adjusted under Permitted Reductions or a Relevant Construction Event if applicable see respective guidance notes) and the Final Installed Capacity should be interpreted in accordance with the interpretation of Installed Capacity above Where you are required to provide evidence relating to the Installed Capacity, such evidence should align with the definition of Installed Capacity as interpreted in this guidance. Low Carbon Contracts Company Ltd Guidance: Installed Capacity & Final Installed Capacity, June

5 3. Final Installed Capacity 3.1. Condition 7.1 requires the Generators to inform the LCCC of the Final Installed Capacity by issuing the Final Installed Capacity Notice Figure 1 below provides an overview of the contractual process for determining the Final Installed Capacity: 3.3. A Generator must give LCCC a Final Installed Capacity Notice following the Start Date and in any event no later than ten (10) Business Days after the Longstop Date; the Generator shall not give more than one (1) Final Installed Capacity Notice. We encourage you to talk to your Contract Manager about the Final Installed Capacity Notice before submitting the notice The Final Installed Capacity Notice shall specify the Final Installed Capacity, being the Installed Capacity which has been Commissioned as at the date of the notice and which shall not be greater than the Installed Capacity Estimate The Installed Capacity Estimate is defined in the CFD as the Initial Installed Capacity Estimate as may be adjusted under Condition 6 (Adjustment to Installed Capacity Estimate: Permitted Reduction) (the Revised ICE ) or under Condition 5 (Adjustment to Installed Capacity Estimate: Relevant Construction Event) ( RCE-Adjusted Installed Capacity Estimate ) see 1 Condition 7.1 (A) of the Standard Terms and Conditions Low Carbon Contracts Company Ltd Guidance: Installed Capacity & Final Installed Capacity, June

6 relevant Installed Capacity Adjustment guidelines. The Initial Installed Capacity Estimate is set out in Clause 7.1 of the CFD Agreement The Required Installed Capacity is set out in Clause 7.2 of the CFD Agreement, and is set for most Generation Technologies at 95% of the Installed Capacity Estimate (being the Initial Installed Capacity Estimate, the Revised ICE, or the RCE-Adjusted Installed Capacity Estimate, as applicable). The Required Installed Capacity is set at 85% for offshore wind projects. Different requirements apply to Eligible Low Capacity Facilities. Example 1: Installed Capacity Estimate, Required Installed Capacity and Final Installed Capacity An offshore wind project with an Initial Installed Capacity Estimate of 150 MW has before the Milestone Delivery Date adjusted the Installed Capacity Estimate to 120 MW (the Revised ICE). Consequentially, the Required Installed Capacity is 102 MW, being 85% of the Revised ICE. Accordingly, the Final Installed Capacity must be between 102MW (the Required Installed Capacity) and 120 MW (the Revised ICE) 3.7 Generators are required under Condition 7.1 to include with the Final Installed Capacity Notice such Supporting Information as the Generator considers relevant to and supportive of its determination of the Final Installed Capacity, including details of the assets comprising the Facility. In order to demonstrate which electrical loads contribute to the Final Installed Capacity, we expect this Supporting Information to include the Commissioning Tests, an electrical schematic diagram and a separate document setting out: a) a description and categorisation of the electrical loads (i.e. generating, parasitic, site load), and, b) the relevant meters and their positioning within the electrical schematic diagram Condition 7.2 provides that the Final Installed Capacity Notice must be accompanied by a Directors Certificate certifying that the information contained in it is true After receipt of the Final Installed Capacity Notice, LCCC has twenty (20) Business Days to respond to the Generator by giving a Final Installed Capacity Response Notice. Such notice shall specify whether LCCC agrees with the Final Installed Capacity Notice or whether additional Supportive Information is required, providing details of the additional Supporting Information required. The Generator then has ten (10) Business Days to provide such additional Supportive Information. Low Carbon Contracts Company Ltd Guidance: Installed Capacity & Final Installed Capacity, June

7 3.10. After receipt of the additional Supportive Information, LCCC has twenty (20) Business Days to respond to the Generator by giving a further Final Installed Capacity Response Notice Note that failure to provide a Final Installed Capacity Notice on or prior to the date which is 10 Business Days after the Longstop Date or the submission of a Final Installed Capacity Notice indicating a Final Installed Capacity lower than the Required Installed Capacity, is a Termination Event under Condition LCCC has the right to terminate the CFD contract on the occurrence of a Termination Event in accordance with Condition 53.1(D) Without prejudice to the right to terminate referred to at paragraph 3.11 above, if the Generator does not give a Final Installed Capacity Notice by the prescribed deadline, the Final Installed Capacity will be deemed to be 80% of the Installed Capacity Estimate As the Generator can only give one (1) Final Installed Capacity Notice and given the termination rights referred to at paragraph 3.12 above, we strongly recommend that Generators contact their contract manager as soon as possible to discuss the Final Installed Capacity Notice for their Project. Feedback If you have any feedback on this guidance, please send your comments to contractmanagement@lowcarboncontracts.uk. Issued: June 2015 Low Carbon Contracts Company Ltd Guidance: Installed Capacity & Final Installed Capacity, June