Montag, 23. Juli 2012

Update UK: Feed-in Tariffs & Renewable Heat Incentive

In an effort for greater certainty for investors in renewable heat and small scale electricity technologies and a fair deal for consumers, the UK Energy and Climate Change Minister Greg Barker clarified future arrangements for Feed-in Tariffs and the Renewable Heat Incentive.

Feed-in Tariffs

The final package of changes to the FITs scheme has been announced by the Department of Energy and Climate Change (DECC) today, following consultation in February this year. This is part of a comprehensive review designed to ensure value for money for the consumer and long term certainty for those who choose to invest.

The changes will affect tariffs for all newly eligible FITs technologies from 1 December 2012 onwards. Changes to solar tariffs, which have already been announced, will take place from 1 August 2012.

A degression mechanism will be introduced for Anaerobic Digestion (AD), wind and hydro from April 2014 in line with uptake of these technologies. Tariffs will be published two months before the degression date and will be based on publicly-available data. Decisions on the degression mechanism for solar were outlined in the Government response published on 24 May 2012.


TechnologyBand (kW)Current generation tariffs (p/kWh)Consultation tariffs from Oct 2012 (p/kWh, 2012 prices)Final tariffs from 1 Dec 2012 (p/kWh, 2012 prices)Community energy tariff (see explanation in paragraphs 148-151)
>2000-=50004.94.5(2.2 from April 2013)4.484.48
>1500-=50004.94.5 (4.1 from April 2013)4.484.48

DECC is introducing a system of preliminary accreditation so all AD and hydro installations and larger wind and PV installations (over 50 kW) will be able to know before construction that they will be accredited. It will also provide certainty over tariffs for six months to two years depending on the technology. This means that if a developer gets their project up and running within the tariff guarantee timescale, they will get the tariff that applied at the time they applied for preliminary accreditation.

A system of advance tariff guarantees will also be available to non-domestic community energy PV projects up to 50 kW. A new hydro band for 100-500kW installations will also be introduced to ensure developers are incentivised to design their project at the most appropriate size.

“Community” FITs projects will be defined on the basis of existing tax law and community schemes will be exempt from the energy efficiency requirement (level D) introduced for solar from 1st April this year. Schools will also be exempt from the energy efficiency requirement even where they do not meet the definition of community scheme. Changes will take effect from 1 December, subject to Parliamentary and state aid clearance.

Renewable Heat Incentive

DECC has also today set out proposals to improve the performance and manage the future budget of the non-domestic Renewable Heat Incentive (RHI) scheme, providing greater certainty to the market.

To ensure the RHI budget is managed effectively, DECC is proposing to introduce a flexible degression based system. Under this system tariffs would be reduced for new applicants if uptake approaches pre-determined trigger points. Tests to see whether degression is needed would take place quarterly, and if a tariff reduction is needed, one month’s notice would be given. Progress towards the trigger points for each technology and the scheme overall would be monitored throughout the year and data published monthly.

DECC has set out plans to introduce greater environmental sustainability into the RHI through the inclusion of standards on Biomass sustainability (in line with the UK Bioenergy strategy published in April 2012) and a clear process for how the air quality regime will work. DECC is also looking to simplify the metering arrangements for the RHI, reducing the administrative burden on participants and taking views on the scheme from existing applicants into account.

Source: DECC

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