The evolution of the fit market and the opportunities currently available
17 October 2014, Since the introduction of the Feed in Tariff (FIT) in April 2010 the renewables market has continued to develop rapidly. New products constantly emerge to target the tariffs available and to help combat reductions in support levels.
The market still proves to be an attractive proposition with solar technology continuing to fall in price and new technology entering the wind, AD and biomass markets. This brings challenges and opportunities: greater competition helps with price and more efficient products are being developed at smaller scales to help overcome planning hurdles yet still provide an attractive return. However, less proven technology from newly established companies brings with it increased risks.
The Government continues to review the tariffs annually, which adds complications in determining the feasibility of a project and its deliverability. Preliminary accreditation provides some assurances for guaranteeing a tariff but is reliant upon securing planning permission and a grid connection.
Addressing technical constraints remains key, with grid and aviation being major show stoppers. Due to network constraints it is becoming increasingly difficult to secure a viable grid connection. Aviation also continues to affect the scale of wind development with airports and radar operators limiting development and stipulating mitigation requirements. At present, in the event of such constraints, there are limited options available and few specialists who can advise on how to reach an acceptable solution, with many developers having to take significant risks prior to obtaining planning to ensure a project can be realised. The rapid deployment of projects also brings further complexities with cumulative impact a big issue. The availability of grid and aviation mitigation is limited and many councils are taking a tougher stance on the number of developments acceptable within an area in terms of their visual and environmental impact, so knowledge of competing applications is key.
The political environment contributes to the success or otherwise of projects, at both a national and local level. Whilst renewable energy as a concept is an important element of our energy mix, political debate continues to affect project deployment.
Despite the current complexities of the market there are still viable development opportunities available and levels of interest are buoyant. Attractive returns are still available where projects offer the ability to either offset on-site energy uses or contract with a neighbouring high energy user for the export of any power or heat.
As the FIT rates are now subject to staged degression based on the level of uptake, it is important that such opportunities are investigated whilst the FIT remains available and landowners are advised to seek independent advice on the opportunities that their assets may currently offer to them.
Associate Partner in the Energy and Marine team. Experienced Environmental Consultant and Project Manager with particular expertise in energy and infrastructure developments. Advises on and manages pr...