Co-location of battery storage alongside renewable electricity generation is becoming increasingly common place, and subsidies for green hydrogen production present new opportunities for co-location. Ofgem's updated guidance on co-location is therefore timely.

The guidance concerns the impact of co-location on eligibility for the Renewables Obligation (RO), the Feed-in-Tariff (FIT), Renewable Energy Guarantees of Origin (REGOs), and the Smart Export Guarantee (SEG).

The guidance gives detailed breakdowns of the impact of co-location under each of the schemes, but the requirements for the RO and the FIT are the most complicated, and the majority of the guidance is concerned with these two schemes.

Ofgem has set out four overarching principles to consider when developing co-located installations:

  • generators must still comply with the renewable support requirements;
  • generators can only receive support for eligible renewable electricity generated by an accredited generating station;
  • installing co-located storage will not alter the Total Installed Capacity of the generating station; and
  • the schemes' eligibility requirements are not changed by the type of storage technology used.

The guidance also covers other key principles, including:

  • The metering arrangements must be able to measure the renewable electricity generation separately from other sources.
  • Ofgem must be notified of the addition of the co-located asset, and of changes to the metering configuration.
  • For the RO in particular, the renewable electricity generation must be supplied to customers in Great Britain or Northern Ireland, or must otherwise be used in a permitted way.

The guidance includes a number of helpful examples, including a new annex for hydrogen production, but Ofgem stresses the importance of assessing each scheme individually.

Ofgem has indicated that it will continue to update the guidance as experience of co-location develops.

If you need assistance in structuring co-located projects, our team of energy experts can help. Please contact Gus Wood or Russell Evans for further information.