Energy Bill amended to allow feed-in tariffs

Renewable electricity plants up to three megawatts could be eligible for support under a ‘feed-in tariff’, according to government proposals.

In October, Secretary of State for Climate Change, Ed Miliband announced the government would introduce feed-in tariffs for small-scale renewable energy sources (ENDS Report 405, p 5 ).

This followed years of pressure from industry and environmental NGOs. Most recently, a coalition of NGOs and industry called for a tariff to be used to support all non-merchant plant (ENDS Report 405, p 42 ).

On 29 October, the government introduced amendments to the energy Bill to bring forward the tariffs.1 The Bill is currently making its way through Parliament.

The amendments are vague. Most details, such as the level of tariffs, will be consulted on before secondary legislation is introduced into Parliament next year. However, the amendments reveal there will be two tariffs.

The first, for renewable and low-carbon electricity, will be paid for each kilowatt or megawatt hour of electricity generated regardless of whether it is used on site or fed into the national grid.

Electricity suppliers will have to pay the tariff to generators, or to the energy regulator Ofgem. Ofgem will then arrange payment.

All types of renewables qualify, including solar, wind and geothermal sources. The size of eligible installations will be decided in the later consultation, but anything above 3MW will not qualify. The only exception is fossil-fuel fired combined heat and power plants. These can be no larger than 50kW capacity.

The level of the tariff will decrease year-on-year, according to the amendments.

The second tariff is for renewable heat installations, and will include producers of biogas or biofuels used for heat. Payments for this tariff will be made by "designated fossil fuel suppliers", although the amendment does not explain what that means in practice.

All renewable heat technologies will qualify for the tariff. However, CHP plants will have to be powered by biomass, biogas or biofuels.

The amendments do not say the heat tariff will have a size restriction or that it will decrease year-on-year.

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