Micro renewables firms call for fixed rate tariffs

Concern over continuing uncertainty in Government support for small-scale renewables and calls for a shift towards guaranteed "feed-in" tariffs were voiced at an industry conference in June. Meanwhile in London, few developers are meeting the Mayor's 10% renewables target for new developments.

"Micro renewable" technologies such as small-scale wind turbines and building-integrated solar photovoltaics (PV) represent a radical departure from the conventional model of centralised energy production and distribution.

The industry has received some support from Government grant schemes - a PV demonstration programme and the Clear Skies programme for other renewable energy technologies. The total budget of both schemes, after recent extra funding, is just over £40 million (ENDS Report 356, p 12 ).

In June, a Renewable Power Association conference discussed progress on developing a micro renewable sector. One of the key messages was the industry's perception of the gap between Government rhetoric on climate change and the reality of its support for micro renewables.

Delegates were particularly concerned over what happens when the existing grant programmes expire in March 2006. The Government plans to replace both schemes with a single "low-carbon buildings programme", but has yet to provide any details on the scheme's budget or how it will operate.

The DTI's head of renewables Bronwen Northmore told the conference that the new programme will last for six years and have two funding streams - one for large-scale projects and one for individuals and communities. The DTI will consult on the programme shortly, she said.

However, many delegates argued that the grants programme will not secure sufficiently rapid growth in microrenewables. They urged the Government to introduce a "feed-in tariff" - a guaranteed price for renewable energy supplied to grid.

Andrew Lee, manager of Sharp's solar division, urged the Government to learn from other countries which had introduced feed-in tariffs with a steady reduction of support over time. This approach has allowed Germany to experience a boom in solar PV, he said, which was one-third cheaper to install than in the UK.

BP Solar's Ray Noble endorsed feed-in tariffs as "by far the best way to move all renewable technologies forward."

In contrast, Terry Rowbury, head of renewable programmes at the Energy Saving Trust which runs the Clear Skies programme, argued that a tariff would have little effect because the UK renewables sector is currently under-developed. Germany's feed-in tariff was introduced on the back of a long-running grants programme, he said.

The DTI's Bronwen Northmore observed that feed-in tariffs "did not work well" with the UK's liberalised energy market. However, she pointed out that the Government has to publish a strategy on micro generation by April 2006, and will shortly consult on options for encouraging the sector's development.

The conference also debated London's chances of becoming a "showcase" for micro-renewables. In his 2004 energy strategy, Mayor Ken Livingstone set a target of generating 665GWh of electricity and 280GWh of heat from up to 40,000 renewable energy schemes in London by 2010 (ENDS Report 353, pp 15-16 ).

To help achieve this, the Mayor's planning strategy requires developers seeking planning permission for major building projects to generate 10% of the energy from renewable sources "where feasible". The caveat was included in all unitary development plans by the Office of the Deputy Prime Minister.

A spokesman for the Mayor was unable to say what progress had been made because "reliable data is not yet available". Deputy Mayor Nicky Gavron told the conference that the caveat allowed most developers to argue against using micro renewables, and suggested that it could be removed.

However, evidence from Merton council, which pioneered the 10% target, suggests a key issue is whether planning authorities have the will to deliver. A development of ten light industrial buildings, including 10 microwind turbines and 5kW of PV, is nearing completion in Merton, and further projects are in the pipeline.

Jeremy Leggett, chief executive of Solar Century, warned delegates that the "spectre" of the nuclear lobby may undermine efforts to promote micro renewables (ENDS Report 364, pp 21-24 ).

A report by the Green Alliance published in June compares the finances of nuclear and micro-generated electricity.1 It says that replacing the UK's ageing reactors with ten new stations would cost £10 billion in construction costs alone. A new reactor is likely to take some 15 years to build and could not make much of a contribution towards meeting carbon dioxide reduction targets before 2020.

The Green Alliance argues that the money would be better spent on small-scale renewables. An investment of £13 billion in micro combined heat and power, micro wind and solar PV could create 15GW of additional capacity, it concludes.

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