On-site power solutions

A guide for large energy users

Across Europe there is a clear and consistent trend for large scale commercial and industrial users of electricity adopting on-site power solutions. This is the result of a range of factors, including:

• renewable on-site generation being one of the most clear-cut ways to help “green” a site’s electricity supply and help the commercial/industrial user achieve their climate change targets;
• on-site power solutions having the ability to provide resilience of electricity supply during times of system outage or constraint;
• avoidance of the network and policy charges typically associated with electricity taken from the grid; and
• the commercial opportunities from leveraging flexible on-site power solutions to reduce consumption from the grid and/or to export electricity onto the grid.

However, while such opportunities mean that on-site power solutions are often an attractive option, on-site projects will generally come with a complex array of legal options and considerations. These range from:

• the fundamental point that such projects inherently involve participation in a typically heavily-regulated arena (and often the backdrop of a set of regulations rapidly evolving to keep pace with the sector), to
• a range of project/agreement structures and parties (without a “cookie cutter” approach) involved in project ownership, operation and electricity sale and purchase, with significant co-dependence between such parties, to
• a government policy context that (while at face value often pro-green) is often increasingly concerned about grid and policy charges being avoided through these types of project and wishes to see all market participants paying a perceived fair share of such costs. 

In this guide we provide an overview of these challenges and opportunities in Europe, with a view to assisting you in reviewing, upfront, the key issues often associated with on-site power solutions of this nature.