The government has today published two documents that the small-scale renewable energy industry has been waiting for.
These are the long-awaited consultation on the future of the Feed-in Tariffs Scheme and also a call for evidence on the future for small-scale low-carbon generation.
Consultation on the closure of the Feed-In Tariff Scheme
The first document is the consultation that confirms the proposal that the government is planning to close the generation tariff to all new schemes, as of 31 March 2019. The industry has known this was coming for a number of years, but in addition, the consultation also proposes closing the export tariff, which essentially means the full closure of the Feed-In Tariffs Scheme to all new applications.
This is clearly a blow to the sector and we will be responding accordingly. While we recognise that the Feed-In Tariff Scheme has ultimately been successful in its aim to increase installation numbers and drive down costs, the complete removal of the scheme will make it hard to get new projects going again.
The deadline for consultation responses is 13 September (11.45pm)
Responses are welcomed online here.
Call for evidence on the future of small-scale renewables
In addition to the consultation, the government has published a call for evidence that seeks to identify challenges and opportunities from small-scale low-carbon electricity generation in contributing to the government’s objectives for clean, affordable, secure energy. The government is also assessing its own role, along with the private sector, in overcoming challenges and realising these opportunities. This document is forward-looking, and while it is good that the government is looking ahead, and asking questions, this paper lacks policy measures and it is unclear what the government is planning to do to support the future deployment of small-scale renewables.
The deadline for the call for evidence is 30 August (11.45pm).
Responses are welcomed online here.
The main points from the consultation are:
The closure of both the export and generation tariffs
The government is proposing to close the export tariff, as well as the generation tariff completely, on the basis that a fixed, flat export tariff, which does not track the wholesale price, often results in generators being overcompensated for their export.
The government is not proposing any real exceptions to the closure, only in the case of ROO-FIT and community-scale projects with pre-accreditation by 31 March 2019. These projects will then have a window to convert to full accreditation (window ranges from 6 months for ROO-FIT scale solar PV to two years for hydro).
Metered export payments market share
Currently, the costs of the Feed-In-Tariffs Scheme is split across all licensed suppliers according to their GB market share, which currently includes deemed export payments. Metered export payments are currently not included in this levelisation and fall on the Feed-In-Tariff licensee of the generators with metered export arrangements. With the proposed uptake of smart meters, the government has proposed to amend the Feed-In Tariff Order (2012) to include the metered export in this levelisation process, with the value of metered electricity to be decided annually by the Secretary of State.
Considerations around energy storage
Energy storage is referenced in the consultation as one of the government’s drivers to move “away from driving deployment with direct subsidies” and “towards fairer, cost reflective pricing”. BEIS has also stated that the export tariff, in its current form, may in fact disincentivise the installation of storage or the opportunity to maximise self-consumption and result in higher costs to bill payers.
In the call for evidence, the government has stated a commitment to link the aspirations of the Smart Systems and Flexibility Plan with future policy on small-scale low-carbon generation. Removing the barriers to storage (as a key smart energy technology) has been a key objective of BEIS.
We are digesting the implications for energy storage further and will share our views with our Electricity Storage Network members in the next few days.
Ultimately, we are concerned that the ending of the Feed-In Tariff Scheme without another scheme in place, will damage the sector significantly and halt new projects.
Don’t hesitate to get in touch with us if you wish to discuss this issue further.