Feed-in tariffs come under attack
The Government believes the values of the Feed-in Tariffs it announced last week will kickstart the market for small scale renewables in the UK. However, many industry observers believe the initiative lacks ambition.
Owners of photovoltaics (PV), wind, hydro power and anaerobic digestion will receive an export tariff of 3p for every kW/hr of electricity they sell back to the Grid and a more generous ‘generation’ tariff for power they use themselves. These tariffs will be guaranteed for between 20 and 25 years.
Micro-CHP up to and including 2kW of generated capacity will also receive a guaranteed tariff, but only as part of a short-term ‘pilot’ scheme that will end after 30,000 units have been installed – or if the scheme runs out of money earlier.
Energy Secretary Ed Miliband said this would change the attitude of consumers towards investment in renewable and microgeneration systems, but admitted that small scale renewables would only contribute 2% of the country's overall electricity capacity by 2020.
Many m&e sector experts believe the tariff should have been more generous to increase that market and there was widespread shock among the CHP community that systems above 2kW were excluded. The 3p export tariff was also a disappointment to many as the Government had indicated right up until the last minute that it would be 5p.
The Conservatives promised to do more if they win the election this spring: "FITs are essential to allow decentralised energy to play a major role in our energy mix, but Labour's proposals lack ambition," said shadow energy secretary Greg Clark. "Ministers should have been bolder with this scheme so more jobs could have been created and greater emissions reductions achieved."
Liberal Democrat energy spokesman Simon Hughes added: "This will disappoint anyone looking to do their bit to contribute towards our energy supply. Another opportunity has been squandered. While dozens of countries already support home energy generation, Labour's plans are too little too late. The government has given in to the nuclear lobby at the expense of community-led power generation."
Friends of the Earth said ministers had been “far too timid” and other critics pointed to the example of Germany, where feed-in tariffs have been in operation for more than a decade. There the total installed solar capacity is 200 times greater than that of the UK. Holland, similarly, gets 40% of its electricity demand from decentralised energy.
“In every election that Labour has fought since 1997 there has been a renewed commitment to renewable energy, but today renewables still only produce 5% of our power,” said Mr Hughes. “The European average is 14%. This performance means that the UK comes 25th out of 27 EU countries in the proportion of its energy supplied from renewable sources – behind Malta and Luxembourg.”
He said that raising the target to 6% of our total energy generation would cost the consumer just 10 pence more on their monthly energy bills.
“The increase in cost to the consumer compares well when we consider the £17 each year which each household will pay for the government's CCS levy and the £20-40 per year which EDF has calculated would be required to incentivise the new generation of nuclear reactors.”
However, Mr Miliband claimed that the system would support families by cutting the payback period on their renewables. He said that a 2.5 kilowatt peak PV system would earn them £900 a year and save £140 on their annual electricity bill.
Click here to read more about the tariffs and to see a full table of the values applied to each technology.