Gas peaking projects—what are they and what key subsidy/support regimes are available to them?
Produced in partnership with Dentons UKMEA LLP
Gas peaking projects—what are they and what key subsidy/support regimes are available to them?

The following Energy guidance note Produced in partnership with Dentons UKMEA LLP provides comprehensive and up to date legal information covering:

  • Gas peaking projects—what are they and what key subsidy/support regimes are available to them?
  • Introduction
  • What is ‘gas peaking’?
  • Subsidy/Support regimes available to gas peaking projects

Author: James Todd. With thanks to David Cruickshank and Jamie Dunne

Introduction

The purpose of this Practice Note is to:

  1. introduce the ‘gas peaking’ projects becoming increasingly prevalent in the Great Britain (GB) electricity generation market, and

  2. set out the key subsidy/support regimes that are making such projects attractive to developers and, where appropriately structured, suitable for project financing

For those interested in the key project issues relevant to the project financing of gas peaking projects, this Practice Note should be read in tandem with Practice Note: Gas peaking projects—key project issues relevant to project financing.

What is ‘gas peaking’?

Peaking technology has been common in the electricity industry and, in broad terms, simply refers to any form of technology which generates electricity at times of peak demand or when there is scarcity of supply.

This note is of particular relevance to sub-20 megawatt electric (MWe) gas peaking plants in GB, which have become increasingly prolific in the last two to three years. These will typically generate and export at times of peak demand, particularly in late-afternoon to mid-evening during the winter months (typically 4 pm–8 pm).

The increasing prevalence of these projects has coincided with and been promoted by (i) the wider availability of new, efficient engines which emit less noise and air pollution and, importantly, which take up less space;