Renewable Energy Projects - Major Developement
The Government has committed to having Feed-in Tariffs (FiTs) in place by April this year (2010), following extensive consultation in the latter half of 2009 regarding the implementation of the scheme, the proposed tariff levels and how the scheme will work “on the ground”. This should be a major step in encouraging further development in the renewable energy sector, especially in technologies such as wind and solar photovoltaics.
The Government’s announcement in February confirmed the details of the FiT scheme which “will allow many people to invest in small scale low carbon electricity, in return for a guaranteed payment for the electricity they generate.”
FiTs are intended to encourage the uptake of small-scale, sustainable energy technologies up to a maximum capacity of 5MW through a simple, user-friendly system designed to provide a fixed price for the electricity generated – but not heat. In addition, for surplus electricity exported to the grid, operators can opt to receive a guaranteed payment of 3p/kWh or to sell electricity on the open market.
FiTs will provide much needed financial certainty in order to encourage individual households, communities, businesses, schools, hospitals, universities etc to consider installing small-scale low carbon electricity generation technologies. At this stage the scheme will only provide incentives for electricity provided from the following technologies:
• Anaerobic Digestion
• Hydro
• Solar Photovoltaic
• Wind,
• Non-renewable micro Combined Heat and Power (CHP)
From 1st April 2010, eligible projects under 50kW installed capacity will only be able to utilise the FiT mechanism as a means of a financial incentive. Those larger projects with an installed capacity between 50kW and 5MW, will have a one off choice between the Renewable Obligations (RO) or alternatively the FiT mechanism.
Existing projects with an installed capacity between 50kW and 5MW, eligible under both the FiT or the RO, will have a one-off choice between staying with the RO incentive scheme or switching to FiT – however, this choice will only be possible until December 2010.
The tariffs for new projects will be fixed for 20 years (25 years for solar photovoltaics) and differ according to the technology and scale of projects. Indicative tariffs for 2010-11 are set out below. The tariff levels for new projects for wind and photovoltaics will decrease by pre-determined rates each year.
* Micro CHP pilot will support up to 30,000 installations
** ‘Retrofit’ means installed on a building which is already occupied; ‘New Build’ means installed on a new building before first occupation; and ‘Stand-alone’ means not attached to a building and not wired to provide electricity to an occupied building.
Over and above the FiT and RO incentive schemes, the Energy Act 2008 made provision for a Renewable Heat Incentive (RHI) which will provide financial assistance to generators of heat from sustainable sources and producers of renewable biogas and bio-methane. It is understood that the development of this scheme is due out for consultation with the RHI being in place by 2011.
Charles HardcastleMRICS, FAAV
Senior Associate
Charles is based in Yorkshire, advising private, institutional and corporate clients on a range of renewable energy schemes across the north of England. He provides specific advice on the feasibility ...
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Charles is based in Yorkshire, advising private, institutional and corporate clients on a range of renewable energy schemes across the north of England. He provides specific advice on the feasibility of wind and anaerobic digestion projects, site acquisitions, negotiating option and lease, joint venture and access agreements, undertaking financial analyses and valuations.
Charles also manages a significant marine estate in the north east of England dealing with all manner of landlord and tenant related matters in relation to port developments, jetties, cables, pipelines, bridges and outfalls.
Outside of work, Charles is a keen cricketer who also enjoys golf and country pursuits.
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