The UK renewables industry has called on the government to clarify what will happen to the Feed-in Tariff (FiT) support system, which is set to be closed next year.
A group of 10 organisations have written to the Business, Enterprise and Industrial Strategy (BEIS) secretary Greg Clark, noting they wish “to express significant concern regarding the delay to the long-awaited consultation on the Feed-in Tariff.”
To date, the FiT regime has supported much of the UK’s small-scale low-carbon generation, the groups say, and press the view that “this portfolio of energy assets is not just helping to meet the UK’s energy needs and carbon targets, but is contributing to Government’s policy ambition through creating a more dynamic, smart and flexible low-carbon energy system.”
Decentralised generation not only produces energy, the letter adds, it also “creates significant socio-economic benefit across the whole of the country, engages communities and is often at the forefront of innovative energy and business models”.
Currently the scheme supports small-scale renewables of up to 5 MW, including photovoltaic (PV) solar, wind, hydropower and anaerobic digestion. It also offers tariffs for micro combined heat and power (CHP) of up to 2kW.
2018 tariffs, which extend until the end of March, offer payments ranging from GBP0.019 per kWh to GBP0.0819 (US$0.03-0.11), depending on the technology type and size of installation. CHP plants can earn a flat rate of GBP0.1395 (US$0.19) per kWh.
“Without a viable route to a market, the benefits that small-scale low-carbon energy projects can deliver to the UK risk being lost. This cliff-edge is creating considerable uncertainty, investor confidence in the sector is waning, with developers increasingly looking to invest elsewhere. UK communities and businesses, as well as industry, risk missing the opportunities that come with developing a vibrant small-scale energy sector,” the letter states.
“We would therefore strongly encourage Government to consult on both outstanding operational issues and the overall future of the Feed-in Tariff with urgency,” it concludes.
Signatories of the letter include RenewableUK, Community Energy Scotland, Country Land & Business Association, EnergyUK, National Farmers Union, Scotland Regen, Scottish Land and Estates, Scottish Renewables, Solar Trade Association (STA) and the Anaerobic Digestion & Bioresources Association.
While further reductions – or even potential withdrawal of some elements of the scheme – beyond 2019 are almost certain, the industry is calling for greater clarity to enable it to respond accordingly. Indeed, STA chief executive Chris Hewett added that: “We are ready to move into the next phase as subsidies reduce, but cannot develop viable business models until we know the rules under which we will be operating beyond Spring 2019.”
RenewableUK executive director Emma Pinchbeck echoed this: “Delays might be all very well in Whitehall – but they can translate into job losses for small businesses across the UK. We need clarity as soon as possible for the sake of these firms and community energy projects nationwide”.