Policy News

Friday 22 January 2010

Small scale renewable generators are anxiously awaiting an announcement from DECC on the final Feed-in Tariff scheme

With an announcement confirming Feed-in-Tariffs expected next month, renewable energy firms are keeping the pressure on the Department of Energy and Climate Change to give equal treatment to pioneers of microrenewables, writes Rachael Meredith.

Trade bodies and the wider renewables sector have all been calling for changes to the proposed scheme since the consultation was launched in July 2009 (see this NewEnergyFocus.com story).

And, it appears that DECC is keeping a tight lid on its decision making. Little has emerged as to what the final levels of the financial incentives for microrenewables will be, or whether DECC has taken on board the large amount of criticism and comment the proposed scheme has received.

Renewable energy community forum YouGen and small scale wind turbine suppliers such as Aeolus Power are among the many calling for equal cashback for microrenewables, claiming that early investors, or "pioneers", should not be penalised through being exempt from the scheme or by having to accept reduced rates.

Christine Griffiths, director of Aeolus Power Ltd, has consistently argued against the proposal that all operators who installed a generator accredited under the Renewables Obligation (RO) before July 15 2009, with a capacity of between 50kW and the FiT maximum of 5MW, will have to remain in the RO (see this NewEnergyFocus.com story).

Speaking to NewEnergyFocus.com today, Ms Griffiths said she still had no idea as to whether that part of the proposals would be changed.

She said: "I have been speaking with other companies and none of us has any idea at the moment what the outcome is going to be. We are all in limbo.

"I would love to think that DECC has taken on board what people are lobbying for, but at the end of the day if it doesn't fit into what they want to happen then it won't happen."

Ms Griffiths added: "I am not an optimistic or a pessimist, I am a realist. If it is changed I will be delighted, but if not then at least I can know that I have done all I can."

YouGen

Equally unsure of what to expect from DECC's announcement is Cathy Debenham, founder of community renewables forum YouGen.

Through YouGen, Ms Debenham started a petition calling for "equal cashback for microrenewables", after being angered by the proposal that generators accredited under the RO before July 15 2009 with a capacity of less than 50kW will automatically transfer to FiTs, but will only be eligible for generation payments of 9p/kWh, regardless of technology (see this NewEnergyFocus.com story). According to YouGen, 117 interested parties signed the petition.

Commenting on whether she believed DECC will have taken note of the petition, Ms Debenham said: "I think if they are wise and want it to be a success then they will have taken it on board. The cost of what we are proposing is not going to be huge but the return will be significant. However, while I am hopeful the rates have been changed my expectations are not very high."

REA

The Renewable Energy Association (REA) has been involved in a number of meetings with the government department with regards to Feed-in Tariffs.

Head of on-site renewables at the trade body, Stuart Pocock, said: "We would hope that DECC will have listened closely to our argument and adapt the structure accordingly."

Since the consultation was published, the REA has been calling for tariffs which "reflect a better return on investment than that set out in the document", notably a rise from the proposed level of 8% to 10%.

Mr Pocock explained that the reason for this is that the REA does not believe 8% will bring all parts of the community into renewables.

The REA also wants to see no tariff degression for the first three years and tariffs which are index linked with taxation. Following on from familiar calls from other sections of the renewables industry, Mr Pocock added that the REA also wants to see existing installations benefit under the tariffs.

Regen SW

Sustainable energy agency for the South West of England, Regen SW, has also been active in campaigning for equal Feed-in Tariffs for early investors and a 10% return on investment.

The agency has written to all South West MPs and national opinion formers highlighting that they believe there is pressure from the Treasury to keep the tariff as low as possible and has called on them to contact ministers to back an "attractive" rate of return.

A spokesman from Regen SW said: "Almost every South West renewables business we spoke to felt that offering existing projects a lower price than new installations than they can currently receive from utilities seriously undermines the credibility of their sector. They are concerned because early adopters are valuable ambassadors for the sector. This view was included in our consultation response."

Merlin Hyman, Regen SW chief executive, added: "It's essential that the government doesn't overlook the issue of subsidies for early investors in renewables. We know from experience that a great deal of positive marketing is achieved through ‘word of mouth' and through promotional material featuring existing projects. So it doesn't make sense for the FIT to penalise early adopters.

"If this happens, the goodwill of these ambassadors will be lost or diminished, with negative consequences for the region's microgeneration businesses and the sector as a whole."

BWEA

Taking a slightly different perspective on the rates of return outlined in DECC's proposals - of between 5% and 8% - the British Wind Energy Association (BWEA) has claimed that it is generally supportive of the decision to provide a range of levels.

Head of small systems at the BWEA, Alex Murley, said: "While we recognise there could be more support, there are positives in providing a range of returns on investment and I don't expect DECC to veer away from its original position on this."

In more general terms, he added that the BWEA is looking forward to the announcement and hopes to get confirmation that the wind tariff bands have been strengthened.

DECC

DECC was unable to confirm when an official announcement will be made, although a decision is expected next month.