Tom Beeley

The Timeline of Changes to the Financial Incentives - FIT's/RHI/ROC's- what happens next?

Transcript

1. Tom Beeley Renewable Energy Adviser, CLA
2. 14th February 2013 Financial Incentives for Renewable Energy Tom Beeley CLA Renewable Energy Adviser
3. About the CLA • CLA is the membership organisation for owners of land, property and businesses in rural England and Wales • 35,000 members own or manage around half the rural land in England & Wales • CLA lobby on behalf of members at EU, national and regional level • Provide independent advice on a wide range of policy issues • Access to member benefits
4. Introduction
5. Agenda • Introduction • Feed in Tariffs • Renewables Obligation • Renewable Heat Incentive
6. Feed in Tariffs • 2011/12 Review and consultations
7. What were the changes? • A series of reductions in PV tariffs • PV tariffs paid over 20 years • Introduction of a 3 tier tariff system for PV • Minimum building energy efficiency requirements for PV • Separate tariff band for multiple PV installations • Structured system of degression for PV and non-PV • Preliminary accreditation introduced from 1st December 2012 • Export tariff increase to 4.5p/kWh
8. Feed in Tariff – PV Degression • Degression provides a structured reduction of tariffs • Tracks falling cost of technology • Maintains returns at target rates between 4.5 & 8% • Tariffs adjusted quarterly according to deployment in previous months • Reduces tariffs by 3.5% each quarter • Scope for flexibility depending on deployment levels • PV Degression is assessed in 3 capacity bandings
9. Time table for tariff changes • New tariff rates announced 2 months prior to changes • Tariff change dates for PV are 1st Feb, 1st May, 1st August, 1st November • E.g. Tariffs from Feb 2013- May 2013 were announced in December
10. Simplified Table of PV Tariffs System size Tariff Rates 2012/13 Total Installed capacity Tariff p/kWh 01/11/12-31/04/13 <4kW Higher 15.44 Middle 13.9 Lower 7.1 >4kW & <10kW Higher 13.99 Middle 12.59 Lower 7.1 >10kW & <50kW Higher 13.03 Middle 11.73 Lower 7.1 >50kW & <100kW Higher 11.5 Middle 10.35 Lower 7.1 >100kW & <150kW Higher 11.5 Middle 10.35 Lower 7.1 >150kW & <250kW Higher 11 Middle 9.9 Lower 7.1 >250 kW 7.1 Standalone 7.1 Export 4.5
11. Feed in Tariff – Non-PV degression • Annual reduction in April each year starting from 2014 • Largest capacity band for each technology is linked to the RO • Tariff rates reduce by 5% each year • No scope to skip a step, but some flexibility in scale of degression • Tariff degression assessed separately for each technology • Opportunity for an additional degression step in October
12. Current rates for non PV Tariff p/kWh Technology Prior to 01/12/12 01/12/12 till 31/03/13 AD 250 kW or less 14.70 14.70 AD > 250kW but less than 500kW 13.60 13.60 AD >500kW 9.90 8.96 Hydro <15kW 21.90 21.00 Hydro >15kW and <100kW 19.60 19.60 Hydro >100kW and <500kW 12.10 (conditional on EU State Aid approval) 15.50 (after date of EU State Aid Approval) Hydro >500kW & <2MW 12.10 12.10 Hydro >2MW 4.90 4.48 Wind 1.5kW or less 35.80 21 Wind >1.5kW but not exceeding 15kW 28.00 21 Wind >15kW but not exceeding 100kW 25.40 21 Wind >100kW but not exceeding 500kW 20.60 17.50 Wind >500kW but not exceeding 1.5MW 10.40 9.5 Wind > 1.5MW 4.90 4.48 Export tariff 4.5
13. Degression non-PV technology Baseline generation tariff based to 2020/21 based on default degression
14. Degression flexibility for non- PV • Degression rates that would apply at different levels of deployment • 2.5% if deployment in the previous year is <75% of the predicted value • 5% if deployment is in the range of 75-150% of the expected value; • 10% if deployment is in the range of 75-300% of the expected value • 20% if deployment is >300% of the expected value.
15. Degression non-PV technology
16. Preliminary Accreditation • Preliminary accreditation introduced on 1st December 2012 • Allows larger projects to ‘lock in’ the level of tariff they will receive • Projects gaining full accreditation receive the tariff appropriate at the date of pre accreditation • Applies to PV and Wind over 50kW & all Hydro and AD projects • Evidence of planning permissions, grid connection agreement & relevant licensing required • Valid for 6 months for PV, 12 months for wind and AD up to 2 years for hydro
17. Preliminary Accreditation cont’d • Applications between 1st Jan and 31st March assigned the Tariff available at 1st April that year. • Be aware - For PV EPC requirements are not assessed at preliminary accreditation and changes to installation after accreditation will negate the tariff guarantee
18. Overall picture for Feed in Tariffs • No changes are applied retrospectively • Tariff rates for PV have fallen, but so have costs • Export tariff rate increase • Structured degression reduces uncertainty for consumers and industry • Preliminary Accreditation reduces risk for larger projects • Feed in Tariff still a great deal for all technologies, especially when electricity generated utilised on site
19. Renewables Obligation • Review of RO bandings took place in 2012 • Number of changes were proposed • Exclusion of installations less than 5MW from RO was proposed • Carried out further consultation on PV banding with response in December 2012
20. Outcome of the banding review • RO remains open to projects under 5MW • ROC allocations reduced • PV split into building and standalone categories • For PV rates better than consultation proposed
21. Current & future bandings ROC’s per MWh Technology Current 2013/14 2014/15 2015/16 2016/17 AD 2 2 2 1.9 1.8 Hydro 1 0.7 0.7 0.7 0.7 Onshore Wind 1 0.9 0.9 0.9 0.9 Building Mounted PV 2 1.7 1.6 1.5 1.4 Ground Mounted PV 2 1.6 1.4 1.3 1.2 Simplified table of ROC bandings
22. Renewable Heat Incentive • Allocated budget of £860 million • Tariffs set by DECC to provide a target rate of return of 12% • Tariffs are index linked • Payments guaranteed for 20 years • Lessons learnt from FIT
23. RHI picture so far – Ofgem Update Jan 2013
24. Picture so far • Slow initial uptake • 171 MW of installations accredited • 90% installations are biomass • Review scheduled for 2014 • Budgetary control mechanism consultation • Two further consultations undertaken to be implemented in Summer 2013
25. Current Tariffs
26. Non Domestic Consultation • Consulting on the expansion of the scheme • Inclusion of direct air heating • Extension of support for biogas combustion to include systems over 200 kW • Sustainability requirement from April 2014 • Energy Efficiency Requirement
27. Energy efficiency - more detail • Energy Efficiency requirements not a surprise • For non domestic buildings minimum level of building efficiency • District heating schemes heating less than 10 properties • District heating schemes heating more than 10 properties
28. Domestic scheme • To support single domestic properties • Supports a range of technologies including biomass, GSHP, ASHP, Solar thermal • Final details of scheme not yet available • Opportunity for those off gas grid offers
29. What will the changes mean? • Wider choice of technologies • Energy efficiency will need to be undertaken • Tariffs remain unchanged • Degression unlikely due to low uptake • Support for AD
30. Overall picture for renewable heat • Great opportunity for those with heat demand and off the gas grid • Even better if you can provide some of your own feedstock for biomass as a free/ low cost fuel • Get in under the non-domestic scheme currently available if you can. • 2013 is the year for the RHI
31. Conclusion • Renewable energy still viable • Good way to diversify income • Protect against future energy price rises • Business sustainability increasingly important • Utilise energy on site for best returns • Don't forget energy efficiency • Range of technologies to select from • 2013 and beyond offers great opportunities for renewable energy
32. Any Questions? Tom Beeley, Renewable Energy Adviser Tom.Beeley@cla.org.uk 0207 4607962