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DECC Feed in Tariff fast-track review published
18th March 2011
Minister of State Greg Barker has just published the Government’s proposals for its fast-track review of the Feed in Tariff for renewable energy.
The main consequence of these proposals could be the killing off of the large scale solar industry in the Southwest despite the benefits of generating low carbon electricity for the national grid, jobs and a new innovative industry particularly in Cornwall.
Private and community solar projects have invested large amounts of money and time into the process with some now nearing completion. Whilst you may recognise the Government’s need to review costs, surely those organisations that have acted in good faith based on what they thought was a Government guarantee should be given the chance to benefit from the original deal.
Below is the press release from the Department of Energy and Climate Change (DECC). I have also copied a link to the full document, which contains information on how to respond to the review.
http://www.decc.gov.uk/assets/decc/Consultations/fits-review/1438-condoc-fasttrack-review-fits.pdf
GREG BARKER OUTLINES PROPOSALS TO PROTECT GREEN ELECTRICITY SCHEME
“Our cash for green electricity scheme is a great way to reward homes, communities and small businesses that produce their own renewable power.”
(Greg Barker)
18 March 2011
Press Release: 2011/027
· Reduced tariffs for over-50kW solar
· Increased support for farm-scale anaerobic digestion
Proposals to reduce the financial support available to larger scale solar-produced electricity have been published by the Government today as part of plans to protect financial support for homes, communities and small businesses.
The consultation follows the launch in February of a fast-track review into how the Feed-in Tariffs (FITs) work for solar photovoltaic (PV) over 50 kW after evidence showing that there could already be 169 MW of large scale solar capacity in the planning system - equivalent to funding solar panels on the roofs of around 50,000 homes if tariffs are left unchanged.
Such projects could potentially soak up the subsidy that would otherwise go to smaller renewable schemes or other technologies such as wind, hydro and anaerobic digestion.
Projections at the start of the scheme had shown no large scale solar under the FITs was expected until at least 2013.
Today’s consultation also covers proposals to provide added support to farm-scale anaerobic digestion given the disappointing uptake of such technologies to date.
Greg Barker, Climate Change Minister said:
“Our cash for green electricity scheme is a great way to reward homes, communities and small businesses that produce their own renewable power.
“I’m committed to an ambitious roll out of microgeneration technologies as part of the Coalition’s green vision of a much more decentralised energy economy.
“I want to make sure that we capture the benefits of fast falling costs in solar technology to allow even more homes to benefit from feed in tariffs, rather than see that money go in bumper profits to a small number of big investors.
“These proposals aim to rebalance the scheme and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers.
“Britain’s solar industry is a vital part of our renewables future and our growing green economy. The new tariff rates we’re putting forward today for consultation will provide a level of support for all solar PV and ensure a sustained growth path for industry.
“Taking a pro-active approach to changing tariffs will allow us to avoid the boom-and-bust approach we have seen in other countries and enable us to support more homes and community schemes, and a wider range of technologies such as wind, hydro and anaerobic digestion.”
As solar PV technology has developed, its costs have reduced, and are now believed to be around 30% lower than originally projected. This means the technology does not need as much support to be competitive.
The Government is therefore proposing reducing the support for all new PV installations larger than microgeneration size (50kW) and stand alone installations. The new proposed rates are:
· 19p/kWh for 50kW to 150kW
· 15p/kWh for 150kW to 250kW
· 8.5p/kWh for 250kW to 5MW and stand-alone installations
These compare with the tariffs that would otherwise apply from 1 April of:
· 32.9p/kWh for 10kw to 100kw
· 30.7/kWh for 100kw to 5MW and stand-alone installations
Such changes are in line with amendments made to similar schemes in Europe where in Germany, France and Spain tariffs for PV have been reduced sharply over the past year.
Alongside the fast-track review of solar, a short study has also been undertaken into the lack of uptake of FITs for farm-scale anaerobic digestion. The study suggests that the tariff for this technology is not high enough to make such schemes worthwhile. The proposed new tariffs are:
· 14p/kWh for AD installations with a total installed capacity of up to 250 kW
· 13p/kWh for AD installations with a total installed capacity of between 250 kW and 500 kW
These compare with the tariffs that would otherwise apply from 1 April of 12.1p/kWh for AD up to 500 kW.
Government policy is specifically to deliver an increase in energy from waste through anaerobic digestion, not to promote energy crops, particularly where these are grown to the exclusion of food producing crops. DECC is talking to Defra and others about the best way to implement controls to make sure this does not happen.
The Government will not act retrospectively and any changes to generation tariffs implemented as a result of the review will only affect new entrants into the FITs scheme. Installations which are already accredited for FITs will not be affected. Solar PV installations less than 50kW are not affected by this fast track review.
These changes are proposed to be implemented in advance of the comprehensive review of FITs, which is currently underway and will look at all aspects of the scheme.
Notes to Editors:
1. Today’s consultation documents can be found on the Feed-in-tariff review consultation web page.
2. An average household solar installation is around 2.5kW.
3. Over 27,000 installations have been registered for the FIT scheme to date.
4. Subject to the outcome of the consultation and parliamentary scrutiny, the revised tariffs would be introduced from 1st August 2011.
5. A separate comprehensive review into the Feed-in Tariffs is now under way. The comprehensive review will determine how the efficiency of FITs will be improved to deliver £40 million of savings, around 10%, in 2014/15 and will look at all aspects of the scheme. It will be completed by the end of the year, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency). Terms of reference can be found on the First review of Feed-in Tariffs web page.
6. FITs is a Great Britain scheme so any changes following this consultation will apply in England, Wales and Scotland.
Government needs to re-think Feed in Tariff fast
4th March 2011
On the 7th February the Minister of State Greg Barker announced a fast-track review of the renewable energy Feed In Tariff (FIT) with the intention of restricting the subsidy of solar energy schemes to a maximum installed capacity of 50 kilowatts (kW), a hundred times lower than the current 5 megawatts (MW) qualification level.
Since the FiT came into effect in April 2010, a robust large scale solar industry has been established in Cornwall on the promise that each (solar scheme) is paid for every kW hour it produces.
With many proposed 5 MW schemes now under way, the Cornish solar industry has already invested millions of pounds into consultation, design, environmental surveys and planning applications to ensure the development of high quality projects, much of this investment employing local businesses and creating jobs.
Reducing the FiT will not only kill an industry over-night, cutting jobs, contracts and personal investment but will also deny Cornwall the opportunity of being at the heart of a sustainable energy industry as well a chance to lead technological innovation for which it was once famous.
Stories about the countryside being paved with solar panels are simply not true; market forces, lack of suitable sites and strict planning controls would probably produce less than forty large scale solar sites within the county and few outside.
It is true that the domestic and small scale commercial schemes are important to the solar energy mix but the larger 5 MW sites are vital in producing the amounts of clean energy needed to benefit the Cornish and UK population as a whole. They will stimulate self sufficiency and help secure against the rising costs of fossil fuels and foreign imports as well as providing a sound investment for pension funds, spreading the benefits of FiT even further. The idea that small scale solar will not be corporate run is also very much in doubt.
As the Government looks towards the private sector to fund sustainable energy, news of the fast-track review has already damaged City and banking confidence in its ability to trust Government policy when weighing up risk. Investment into sustainable energy technology has now almost dried up, which is a worrying situation.
I fear that the review will not only damage many individual businesses and investors in Cornwall but also a potentially viable and exciting Cornish solar industry, not to mention the matter of trust in the government when is comes to energy policy.
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