Form: Contracts for Difference, renewables obligation and small scale feed-in tariffs: apply for an exemption or compensation

If your organisation is involved in developing or operating renewable energy projects, you may be aware that indirect costs associated with funding the Contracts for Difference (CfD), Renewables Obligation (RO) and Small-scale Feed-in Tariffs (FiTs) can place a financial burden on developers, operators and investors. In some cases, it may be possible to obtain an exemption or compensation for a proportion of these indirect costs. This guide outlines the key steps, eligibility considerations and practical tips to help you navigate the process.

1. Understand the background and scope
– CfD, RO and small-scale FiTs are policy instruments designed to support low-carbon electricity generation. They are funded through levies or charges, and organisations involved in these schemes may incur indirect costs such as administration, risk management, hedging, and financing costs.
– Indirect costs can include internal resources dedicated to compliance, reporting, and bid preparation, as well as external fees for consultancy, legal advice, and financial modelling.
– Exemption or compensation mechanisms, where available, aim to ensure the financial viability of projects and to avoid undue burden on participants.

2. Identify the appropriate exemption or compensation route
– Government departments and energy regulators periodically publish guidance on exemptions, reliefs, or compensation schemes related to CfD, RO and FiTs. These pathways can vary by jurisdiction and over time.
– Common routes may involve:
– Exemption from certain levies or charges that fund the schemes.
– Partial compensation for a defined proportion of indirect costs linked to compliance and administration.
– Grants, reliefs, or rebate schemes administered by government bodies or industry regulators.
– Confirm which mechanism applies to your organisation’s activities, whether as a project developer, supplier, or administrator within the CfD, RO or FiTs framework.

3. Gather the relevant evidence and documentation
– Core project details: project name, location, capacity, technology type, and timescales.
– Financial information: project budget, sources of funding, capital structure, and the portion attributable to indirect costs.
– Cost breakdown: a detailed ledger or workbook separating direct costs (e.g., construction, equipment) from indirect costs (e.g., compliance, reporting, hedging, internal administration).
– Compliance records: evidence of regulatory engagement, bid submissions, contract negotiations, and ongoing reporting requirements.
– Evidence of eligibility: any previous correspondence with the regulator, government department, or administration related to exemptions or compensation.

4. Establish a clear methodology for attributing indirect costs
– Transparency and consistency are critical. Develop a robust methodology to demonstrate how indirect costs are allocated to CfD, RO or FiT activities.
– Consider:
– Absorption method: allocating a fixed portion of indirect costs to eligible activities based on a rational basis (e.g., headcount, time spent, or project scale).
– Activity-based costing: distributing indirect costs according to the specific activities required for compliance and administration.
– Time-tracking: documenting how much time staff and contractors devote to scheme-related tasks.
– Document assumptions, data sources, and calculation formulas. Include sensitivity analyses to show how costs would vary under different scenarios.

5. Engage with the relevant authority or administrator
– Contact the regulator or government body responsible for administering the exemption or compensation scheme. This could be Ofgem in the UK, devolved equivalents, or the central department handling CfD/RO/FiTs.
– Seek initial guidance on eligibility, required forms, submission timelines, and whether ex ante or ex post claims are expected.
– Confirm whether you need to appoint a recognised third party (e.g., auditor or consultant) to validate your methodology and figures.

6. Prepare a formal application
– Structure:
– Executive summary: a concise statement of eligibility and requested relief or compensation.
– Background: overview of the project and the purpose of the exemption.
– Methodology: transparent description of how indirect costs are allocated and measured.
– Financial impact: quantified headroom or credit against levies, with supporting calculations.
– Risk and governance: internal controls, audit trails, and compliance measures.
– Supporting evidence: annexes with cost breakdowns, invoices, time records, and contracts.
– Attach any required forms or templates specified by the administering authority.
– Ensure accuracy, legibility, and consistency across all documentation.

7. Submit and track the application
– Adhere to submission deadlines and preferred formats (digital portals, email, or physical copies, as required).
– Request confirmation of receipt and establish an expected processing timeline.
– Be prepared to provide supplementary information or to participate in interviews or site visits if requested.
– Maintain a clear record of communications and any amendments to your application.

8. Respond to feedback and complete the process
– If the authority requests clarifications or adjustments, provide timely, precise responses with referenced documentation.
– Once a decision is issued, review the terms carefully. If approved, implement the relief or compensation as directed, including any reporting or periodic review obligations.
– If the application is denied or partially approved, analyse the reasons and consider whether an appeal, revision, or supplementary submission is appropriate, subject to applicable time limits and procedures.

9. Maintain ongoing compliance and monitoring
– Even after approval, continue to monitor and document indirect costs and their allocation to CfD, RO or FiT activities.
– Prepare periodic reviews or audits as required, and update the administering authority with any material changes to project scope, funding, or cost structures.
– Plan for renewals or re-submissions if the exemption or compensation is time-limited or contingent on ongoing eligibility.

10. Practical tips to improve success
– Start early: gather data, establish methodology, and engage with the regulator well ahead of deadlines.
– Be meticulous: thorough documentation and transparent calculations reduce back-and-forth and accelerate decision-making.
– Seek expert input: consider engaging a specialist with experience in energy subsidy schemes and cost allocation to validate your approach.
– Align with broader compliance: ensure that the application integrates with your existing governance, risk management and finance processes.
– Maintain consistency: apply the same methodology across all projects or activities within the scope to avoid fragmentation.

Final thoughts
Securing an exemption or compensation for a proportion of indirect costs linked to CfD, RO and small-scale FiTs can substantially improve project economics and financing flexibility. By understanding the available routes, building a rigorous evidentiary package, and engaging proactively with the administering authority, organisations can navigate the process more effectively and increase their chances of a favourable outcome. If you would like, I can tailor a checklist or build a sample template specific to your project profile and jurisdiction to help streamline your submission.

May 12, 2026 at 01:49PM
形式：差额合同、可再生能源义务及小规模并网电价激励：申请豁免或赔偿
https://www.gov.uk/government/publications/renewables-obligation-and-small-scale-feed-in-tariffs-apply-for-compensation
如何为为差额合同、可再生能源义务及小规模并网电价激励的间接成本融资比例申请豁免或赔偿。

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