EGL22530 - Exemption for new investments: qualifying projects

F(2)A23/S311A(4) defines a qualifying project.听바카라 사이트淨ualifying project바카라 사이트� means a project to commission new generating plant for one of three purposes 바카라 사이트�听

  • The creation of a new generating station,听

  • The replacement of the generating plant of an existing station provided the whole, or substantially the whole, of the plant is replaced, or听

  • The increase of the generating capacity of an existing station.听

Each is discussed further below.听

The creation of a new generating station听

The identification of this type of project should be straightforward as it will invariably involve the construction and commissioning of a clearly identifiable new site with its own, separately metered, connection to the electricity distribution network.听

The replacement of the generating plant of an existing station听

This equates to the process referred to in the energy sector as 바카라 사이트渞epowering바카라 사이트� which is where the whole, or substantially the whole, of the generating plant of an existing station is replaced, as reflected in the language used in the rule.听

Where such a project takes place then the whole of the capacity of the station will be within the scope of the exemption.听

Such a project will typically not involve replacement of all elements of the station infrastructure hence the focus on 바카라 사이트済enerating plant바카라 사이트�.听For example, the project may involve replacing just the actual solar panels in a solar power station, utilising the existing panel supports along with the cabling and transmission equipment.听 Similarly, it may involve the replacement of the turbines and blades of a wind power station, retaining the towers and other infrastructure.听

Whether 바카라 사이트渟ubstantially the whole바카라 사이트� of the plant has been replaced will depend on the circumstances of a particular generating station.听For example, a wind power station may contain 30 turbines of which 25听were part of the original development and are now approaching the end of their useful lives but 5听were added more recently and do not require replacement.听 It would be reasonable to conclude that the replacement of the life-expired turbines听represents the replacement of substantially the whole of the generating plant.听听

The increase of the generating capacity of an existing station听

This type of project may involve an expansion beyond the former boundaries of a site听or the installation of additional generating equipment within an existing site. The focus here is on the creation of additional capacity (the rated capacity of the station in megawatts) and not simply an increase in output by more efficient use of existing capacity (an increased output in megawatt hours).听

Indicators of a project that meets the definition would include the obtaining of a new interest in land or seabed, or the bringing into use of a previously undeveloped area of land or seabed (which may represent a discrete generating station) or the provision of separate metering of the resulting additional output.听 The provision of a distinct metering, though a useful indication of station expansion, would not be regarded as determinative.听听听

Examples of projects that may qualify would be an existing wind power station that has 20 turbines and a further five are added within the boundary of the existing site, or where an additional biogas turbine is installed in an existing waste treatment facility.听听听

The refurbishment, general repair, maintenance and replacement of parts in an existing site would not be a qualifying project for the exemption even where such activities lead to the operation of an existing generating station beyond its originally planned life.听This includes cases where听such听works are essential for maintaining听capacity or could lead to increased capacity.听Such activities would typically represent听part of an existing plan to maintain the station over its working lifetime rather than a new investment project.听听

Where a project qualifies under this condition then it is only the resulting additional generating capacity that may qualify for the exemption, F(2)A23/S311A(5) & (6).听In effect, the additional capacity is treated as if it is听that of a generating station outside the charge to EGL, and a fair and reasonable apportionment should be made where the output is not separately metered.听 The requirement for the attribution of generation receipts to be made on a fair and reasonable basis is to be found in F(2)A23/S283(2).听听

Returning to the example of a wind power station with 20 turbines and a further five added, the exemption would apply to the metered output of those five new turbines, if that is known.听Otherwise, using the proportion that the capacity of those new turbines bears to that of the whole station would be a reasonable approach.However, that may not produce a fair result if some of the turbines suffer from significant outages during the relevant qualifying period in which case some further adjustment may be appropriate.听 HMRC considers that a reasonably broad-brush approach will be appropriate in most circumstances.听