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Yet, as developers and investors take their accredited projects to market, understanding the finer details of the significant financial commitment grace period remains as important as it has ever been.
For those projects relying on the significant financial commitment grace period and commissioned between 31 March 2016 and 31 March 2017 (for projects 5MW or under), or between 31 March 2015 and 31 March 2016 (for projects greater than 5MW), evidence needed to be submitted to Ofgem alongside the accreditation application to prove the project met the relevant criteria
For a standard non-private wire project, this evidence typically included:
What is important to note here is that, although Ofgem will have reviewed the above evidence, asked any follow up questions and then granted accreditation based on their assessment, this is by no means the end of the road as far as guaranteeing accreditation for the life of the project is concerned.
Ofgem can conduct an audit at any point of the project’s accredited life to ensure that accreditation has been correctly awarded. Ofgem has confirmed that this audit can cover any matter relating to accreditation, even going so far as to look behind the land rights declaration described at bullet point three, above.
It is therefore important that buyers of such projects carry out their own due diligence and don’t rely on the fact that accreditation has been awarded. The main items to look at typically revolve around what the initial accreditation assessor won’t have seen, including:
This is not an exhaustive list, and an adverse answer to one of the above questions does not necessarily mean that the project is at risk of losing accreditation. However, they are important points for any potential acquirers to consider at the due diligence stage.
When acting for potential acquirers, the TLT team ensures sufficient due diligence to understand what, if any, risk exists around a potential adverse audit on a project's accreditation status.Contributor: Nick Rains, Chartered Legal Executive – Corporate
 It is important to note that <5MW projects accredited between 22 July 2015 and 31 March 2016 must have also met the significant financial commitment grace period in order to qualify for grandfathered RO support. However, no evidence of this needed to be submitted to Ofgem alongside the accreditation application. Extra care therefore must be taken when reviewing the relevant documents as Ofgem will not have seen them, and their suitability will be vital to ensuring the project's ROC support level does not decrease as a result of future banding reviews.
08 January 2018
by Kay Hobbs