CfDs at Regen SW. Experience of a developer who received a CfD and lessons for bidding strategy and scheme design. James Rowe

Transcription

1 CfDs at Regen SW Experience of a developer who received a CfD and lessons for bidding strategy and scheme design James Rowe

2 About Hadstone Hadstone Energy is a developer of UK solar parks and was founded in Hadstone focusses on ground-mounted solar parks in southern England, though also has the largest consented project in Northern Ireland. James is a director of Hadstone. Prior to (and since) co-founding Hadstone, James raised funding for other people s renewable energy projects as a corporate finance advisor, including for rooftop solar projects in 2011 and 2012 and hydropower projects in 2014 and Before that, James was Global Head of Structured Finance at National Australia Bank in London, running a commercial banking team. He has degrees in Mathematics and Economics. 2

3 Four topics: What Did We Expect? What Happened? Lessons for bidding strategies Lessons for Scheme Design 3

4 What Did We Expect? 4

5 What Did We Expect? 5

6 What Happened? Project Name Developer Technology MW Strike Price ( ) Delivery Year Pot Wick Farm Solar Park Hadstone Energy Limited Solar PV Pot1 Royston Solar Farm Royston Solar Farm Ltd Solar PV Pot1 Brenig Wind Farm Brenig Wind Limited Onshore Wind Pot1 Charity Farm Lightsource SPV136 Limited Solar PV Pot1 Netley Landfill Solar REG Netley Solar Ltd Solar PV Pot1 Triangle Farm Solar Park Cambridgeshire County Council Solar PV Pot1 Mynydd Y Gwair Wind RWE Innogy UK Limited Onshore Wind Pot1 Sneddon Law CWF Sneddon Law CWF Onshore Wind Pot1 Dorenell Wind Farm Dorenell Limited Onshore Wind Pot1 Kype Muir Wind Farm Banks Renewables Onshore Wind Pot1 Clocaenog Forest Wind RWE Innogy UK Limited Onshore Wind Pot1 Middle Muir Wind Farm Banks Renewables Onshore Wind Pot1 Nanclach Wind Farm Nanclach Limited Onshore Wind Pot1 Solwaybank Wind Farm Solwaybank Energy Limited Onshore Wind Pot1 Coire Na Cloiche Coire Na Cloiche Windfarm LLP Onshore Wind Pot1 Bad a Cheo Wind Farm RWE Innogy UK Limited Onshore Wind Pot1 Tralorg Wind Farm PNE WIND UK Ltd Onshore Wind Pot1 Moor House Wind Farm Banks Renewables Onshore Wind Pot1 Achlachan Wind Farm Achlachan Wind Farm LLP Onshore Wind Pot1 Common Barn Wind Common Barn Wind Farm Ltd Onshore Wind Pot1 6

7 What Happened? 7

8 What Did We Expect? 8

9 Note - Anything below the strike price is a total fabrication!!! What Happened? 9

10 Note - Anything below the strike price is a total fabrication!!! What Happened? 10

11 Note - Anything below the strike price is a total fabrication!!! What Happened? Death zone! 11

12 Note - Anything below the strike price is a total fabrication!!! What Happened? Solar Parks Onshore Wind 12

13 Note - Anything below the strike price is a total fabrication!!! What Happened? Gridstranded Zombie wind projects < ROCS NO ROCS > 13

14 What Happened? The missed opportunity: subsidy was available but can t be accessed and is gone for good. 14

15 What Did We Expect? The missed opportunity: subsidy was available but can t be accessed and is gone for good. 15

16 What Happened? In summary: Zombie Wind Projects that couldn t connect under ROCs (i.e. before 31 March 2017) could bid. They d been on hold expecting to bid in 2016 not For projects in the last two delivery years, non-delivery disincentive does not work. So why not have a punt? Very few solar bids in 2015/16 because of grandfathering provisions in ROC changes. Sparse bids in 2015/2016 resulted in the death zone => 50 Strike Price A rising tide doesn t float all boats. If the marginal bid of had been in 2015 not 2018 then Hadstone would be fine seems random, arbitrary and unfair. No big renewable projects in 2015 and 2016 because 2018 wind zombies ate everything. 16

17 Lessons for bidding strategies If you bid late and low, you can choose: Brown power for a while (good idea Lars), or Holding off for a few years and hoping modules get cheaper. If you re a small developer and Wind and Solar remain in the same CfD pot, think about learning a language or taking up a new sport. Life s too short. If you re a big developer with tied funding, bid at cost and hope for the best. 17

18 Lessons for Scheme Design Part 1 Your CfD is based on the gross DC MWp capacity that you have planning permission for, so a crowded design is a good starting point. Make sure your grid offer is at least 75% of your DC capacity Either get a section 16 grid offer or get planning and all other permissions for your connection route, rather than having a surely you can t be serious? discussion with National Grid in October. 18

19 Lessons for Scheme Design Part 2 National Grid have produced simple and comprehensive manuals. Print them ALL out and read them cover-to-cover in May 2015 not October If new ones come out, read them too! Fill in your application form (all 600 lines) in May and get a lawyer to review it. It s really easy to make trivial mistakes in May that you can t fix in October. 19