On the 17th December the UK Government published the results of the Consultation into the Feed in Tariff which has resulted in the Department for Energy and Climate Change (DECC) reducing the scale of the cuts which were originally proposed back in September 2015.
The Proposed Tariffs represent good news for the medium wind sector and small solar schemes which have seen their tariffs increase significantly from the proposed levels outlined in September 2015. However stand alone solar and hydro schemes have seen further reductions to the tariffs that were proposed in September 2015. The full details of the proposed tariffs can be seen in the table below:
|
Tariffs (p/kWh) |
Installed capacity |
Consultation tariffs |
New tariffs (Jan 2016) |
|
Solar |
<10kW |
1.63 |
4.39 |
|
10 – 50kW |
3.69 |
4.59 |
|
|
50 – 250kW |
2.64 |
2.70 |
|
|
250-1000kW |
2.28 |
2.27 |
|
|
> 1000kW |
1.03 |
0.87 |
|
|
Stand alone |
1.03 |
0.87 |
|
|
|
|
|
|
|
Wind |
<50kW |
8.61 |
8.54 |
|
50-100kW |
4.52 |
8.54 |
|
|
100–1500kW |
4.52 |
5.46 |
|
|
>1500kW |
0.00 |
0.86 |
|
|
|
|
|
|
|
Hydro |
<100kW |
10.66 |
8.54 |
|
100-500 kW |
9.78 |
6.14 |
|
|
500-2000kW |
6.56 |
6.14 |
|
|
>2000kW |
2.18 |
4.43 |
With regard to the Feed-in Tariffs, Government has also announced:
- Deployment caps will be set to limit new spending on the scheme to £100m up to the end of 2018/19;
- The re-introduction of pre-accreditation for solar PV and wind generators over 50kW and all hydro and anaerobic digestion generators; and
- Measures to pause new applications to the FIT scheme from 15 January to 8 February, to allow time for the implementation of cost control measures.
Whilst the above proposed tariffs still represent a significant cut from the current levels, the increase in the proposed tariff for the medium scale wind sector could see companies starting project development again on suitable sites. One of TNEI’s key clients has already stated that they would re-start looking at developing sites for medium scale wind turbines.
However, despite this and the proposed increases in some of the tariff bands the reaction from the industry has been mixed. Some developers and bodies have welcomed the proposed increases to some of the tariff bands which shows that the Government has partially listened to the renewables industry during the consultation process. However, there are also some views that the proposed changes to the levels are subsidy do not accord with the agreement signed in Paris last week and are still deeply damaging to the industry, especially when compared to the levels of support being given to back up generation.
The move to re-introduce pre-accreditation has been welcomed as it will give investors more certainty on returns before committing to project financially.
The industry is still waiting further details on the level of support available for AD projects which we believe will be consulted on in 2016, alongside the review of the Renewable Heat Incentive (RHI).
In addition DECC also confirmedseparately, that it will end support for all new solar farms supported through the Renewables Obligation scheme from 1 April 2016, including installations smaller than 5MW in capacity, however developments that met the criteria for the submission of applications on or before the 22nd July 2015 deadline have been given a grace period to develop their sites. This required developers to have a valid planning application on or before the 22nd July and that this should be confirmed in writing from the Local Planning Authority.
If you require any further information on the Feed in Tariff announcement, please feel free to contact Niall Kelly at TNEI either by email at niall.kelly@tnei.co.uk or phone on 0191 2111400.
