After months of negotiations, Industry Minister Ian Macfarlane has confirmed that on 8 May 2015 the Australian Government and the Opposition have agreed in principle a revised Renewable Energy Target (RET) of 33,000 gigawatt-hours (GWh) of large scale renewable energy by 2020. Read More
SGI-Mitabu, a joint venture of two Australian solar companies, The Solar Guys International and Mitabu Australia, has revived its plans to fund its Indonesian 250 megawatt solar project with Islamic compliant funding. The solar project will require up to A$550 million of financing. Commencing in July 2015, the first phase of the project will be funded through an offer of A$150 million of sukuk (a type of Islamic investment instrument, similar to a bond).
Read more here.
The Oregon legislature is considering a bill that would require the state’s large electric utilities to procure one or more “qualifying energy storage systems” by January 1, 2020. H.B. 2193 would apply to any entity that is engaged in the business of distributing electricity to retail electricity consumers in Oregon (not including a consumer-owned utility) if the entity makes sales of electricity to retail customers in an amount that equals 3 percent or more of all electricity sold to retail electricity customers in Oregon. An energy storage system is deemed to be “qualifying” if it is “cost-effective,” and the legislation contemplates that each electric company would procure one or more such systems having the capacity to store not less than 5 megawatts of electricity but not more than an amount of electricity that is equal to one percent of the company’s peak load for 2014. H.B. 2193 would allow an electric company to recover in its rates all costs prudently incurred in procuring one or more cost-effective energy storage systems, “including any above-market costs associated with procurement.”
K&L Gates is pleased to announce that partner Jenny Mee will be a presenter at the inaugural Energy Storage Council Conference, on May 13-14, in Melbourne, Australia. This informative and comprehensive two day conference will explore important issues relating to the advancement of energy storage solutions in Australia and globally, including market developments and trends, technology integration, policy and industry case studies.
Click here for full event details.
South Carolina’s major utilities recently submitted their proposed distributed energy resource programs to the South Carolina Public Service Commission (PSC) for approval. The proposals come in the wake of the South Carolina Distributed Energy Resource Act of 2014 (commonly referred to as Act 236), which went into effect on June 2, 2014. Applauded as landmark legislation resulting from collaboration among utilities, electric cooperatives, environmental advocates, and solar businesses, Act 236 paves the way for the development of solar power and other renewable energy sources in South Carolina. Read more here.
The Energy Market Reform Working Group in Australia released a consultation paper at the end of 2014 regarding the regulatory implications of new products and services in the national electricity market.
New products and services include energy supply from generation facilities installed at the customer’s premises (which may be combined with energy storage), products and services relating to demand management and energy information and advice.
The paper outlines some of the potential regulatory implications of these new products and services. It seeks feedback from stakeholders as to the types of new products and services which may be offered to small customers and whether regulatory reforms may be necessary – from either a consumer protection or a power system operations perspective.
Stakeholders are invited to make submissions on the issues raised by the consultation paper by close of business on 20 March 2015. Written submissions can be sent by email to energycouncil@industry.gov.au. Alternatively, please contact us and we would be happy to assist you in preparing a submission.
To read more about this consultation paper and the key findings and issues identified, please click here.
The Australian Government recently announced that the first Emissions Reduction Fund auction will occur in April 2015. The Emissions Reduction Fund provides proponents of carbon abatement projects with opportunities to enter into contracts with the Government, via the Clean Energy Regulator, under which the proponent receives payment for undertaking carbon abatement. In the reverse auction process project proponents will submit sealed bids for the Clean Energy Regulator to purchase (in the form of Australian carbon credit units) emissions reductions generated by their projects.
Successful auction bids will be those with the lowest price, and successful proponents will then enter into Australian Carbon Contracts with the Clean Energy Regulator. The first auction will be open from 9.00am (Australian Eastern Standard Time) on 15 April 2015 and close at 5.00pm on 16 April 2015 (Australian Eastern Standard Time). The auction will occur through the online bidding platform Austender.
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New York – A cross-border team of lawyers from global law firm K&L Gates LLP has advised Québec-based Boralex Inc. (TSX: BLX) on its acquisition of French wind farm owner and operator Enel Green Power France SAS for a total net consideration of approximately €280 million in cash. The transaction makes Boralex the largest independent wind power producer in France, and the third largest onshore wind player, behind only the two incumbent French utilities.
The K&L Gates team advising Boralex on the acquisition and on the related approximately €175 million project financing was led by New York corporate partners Sandy Feldman and Holly Hatfield. Other members of the team include New York tax partner Adam Tejeda and corporate associate Justin Purtle; Paris corporate partners Olivia Lê Horovitz and Caroline Ledoux, tax partner Bertrand Dussert, real estate counsel Joanna Klat, corporate associates François Lan, Nawal Sabsibo, and Alexandre Brossier, and labor and employment associate Julie Bouchard; and Frankfurt finance partners Matthias Grund and Bastian Bongertz and finance associate Dominik Pauly.
K&L Gates regularly represents Boralex in both the U.S. and Europe, including in previous transactions in France such as the 2012 acquisitions of French wind company interests from both U.S.-based AES Corporation and French company InnoVent SAS.
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On January 13, 2015,, the Internal Revenue Service (IRS) released Notice 2015-4, which provides new guidance on the small wind energy project credit under Section 48 of the Internal Revenue Code (IRC). In particular, the guidance provides that small wind energy projects must meet certain performance and quality standards to qualify for the credit. The official notice is scheduled to be published on January 26 in Internal Revenue Bulletin 2015-4.
Notice 2015-4 provides that Section 48-eligible property must use a wind turbine that has a nameplate capacity of not more than 100 kW and meets the performance and quality standards as set forth in either:
(1) American Wind Energy Association (AWEA) Small Wind Turbine Performance and Safety Standard 9.1-2009; or
(2) International Electrotechnical Commission (IEC) 61400-1, 61400-12, and 61400-11.
Small wind turbines must meet the AWEA or IEC standards that are in effect at the time of acquisition of the turbine.
The manufacturer of the turbine may provide a taxpayer with a certification that the manufacturer’s turbine meets one of the standards listed above, and taxpayers may rely on such certifications when claiming the credit under Section 48. However, manufacturers should be aware that issuing erroneous certifications or failing to satisfy certain documentation requirements could trigger penalties under IRC Section 7206 (fraud and making false statements) or IRC Section 6701 (aiding and abetting an understatement of tax liability).
Notice 2015-4 is effective for small wind energy property acquired or placed in service after January 26, 2015.
The National Electricity Amendment (Distribution Network Pricing Arrangements) Rule 2014 No. 9 (Rule Change) came into effect on 1 December 2014, amending the Australian National Electricity Rules (NER) by introducing a more ‘cost reflective’ model for network pricing. Under the new regime, distribution tariffs must comply with several new pricing principles, with the objective that the network prices that a Distribution Network Service Provider (DNSP) charges each consumer should reflect its efficient costs of providing network services to that consumer.
To read the full alert, click here.
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