Feed-in Tariff consultation announcement

22/7/2012

DECC have announced the changes from 1 October and 1 December 2012 here.

I have extracted decisions relevant to micro hydro from the Government response following the consultation and added my initial comments here. Key points differing from the present arrangements are:

the issue of accreditation for micro hydro schemes has been resolved: accreditation by Ofgem using the ROO-FIT process, and not MCS, will be the "more permanent arrangement" for determining eligibility for the Feed-in Tariff from now and "indefinitely"; there will be no alternative accreditation method for the present but there will be further discussion on this
micro hydro schemes will be allowed to apply for "preliminary accreditation" at the prevailing FiT rate once they have obtained planning consent, any necessary environmental licences and, where applicable, a grid connection offer
energy efficiency requirements will not be applied to micro hydro schemes
index-linking will remain, based on RPI
the export tariff will be increased to 4.5p from 1 December 2012 (for new installations)
a new intermediate hydro band in the range of 100–500kW, with a generation tariff of 15.5p/kWh from 1 December 2012; the full tariff table for hydropower from 1 Octber 2012 is otherwise as proposed (the new tariffs apply only to new installations):

a new mechanism is being introduced to cap the cost of the Feed-in Tariff called "degression". This will mean a reduction in the tariff for new installations as more hydro schemes are implemented but DECC have not split the cap between different capacity bands. The implementation of a few large-scale schemes is likely to result in reductions in the tariff before many micro hydro schemes have been implemented owing to the limited industry resources in this sector.

11 Comments

mike kirwin

23/7/2012 11:10:24

This is a tiny pigeon step in the right direction.

The banding issues still remain but are slightly reduced (ie schemes will continue to be sized to fit the FiT and not the river).

And after 4 years of deliberation, at least a decision has finally been made regarding accreditation of installers.

True to form - this is all neatly summarised in a 55 page document that no one has the time to read, other than a small percentage of those employed in the industry and the authors.

"proposed installations must have planning approval and evidence of
acceptance of a firm grid connection offer" - does this mean that off grid hydro no longer qualifies for the FiT????

Gavin King-Smith link

23/7/2012 12:36:02

Just a small omission I'm sure - I shall be sending some questions in including this one.

Jamie Wallace

24/7/2012 11:26:19

Unfortunately the government have tied all the hydro bands together with regards to the degression triggers. This means that micro-hydro will face a 5% rather than 2.5% cut regardless of whether it is under-deployed if the big hydro players manage to install more then 7MW (which I assure you they will, particularly with the new band). This is a very important point because the degression reduction for under-deployed technologies is intended to foster innovation and thus bring the costs down. It is vital that each FiT band be assigned it's own degression trigger besed on the expected deployment of that scale. Not doing this will mean a great many smaller systems could become un-viable because big-money players in the 100 - 500 kW band have triggered degression before the micro-hydro industry has had a chance to grow and find the eficiencies required to keep small systems viable. I'll be writing to my MP about this, I'd strongly advise all who read this to do the same.

24/7/2012 11:40:16

can you publish your letter here - for copy, paste and post purposes?

Gavin King-Smith

24/7/2012 11:53:34

Yes - this is a considerable risk for small-scale hydro - I will be including this in my response and agree that others should write to their MP.

Brian faux

28/7/2012 04:53:21

Good work as usual Gavin.
I am unclear as to whether degression applies to all installations or only new commissions.
So is the rate for existing generators (ie 21.9p + rpi +3p export) staying for remainder of 20 year life or will it be changing with the new regs?

28/7/2012 05:13:49

My clear understanding is that the degression applies only to the starting tariff for new schemes. Once a scheme has been accredited for a particular tariff, it remains in place for 20 years plus inflation at RPI. However, I agree that it is not spelt out very clearly in the Government Response, though the intention to give financial certainty is clear. There will be a draft statutory instrument in due course so that will need to be spelled out there.

As for existing FiT-acccredited schemes, I believe the FiT generation rate you receive from your supplier now will remain in place for the 20 year life from when it started, again inflated by RPI. I believe that the export rate will only be increased to 4.5p/kWh for new schemes from 1 December 2012. This is spelled out clearly in the Government Response.

29/7/2012 12:29:52

Yes the bit about export at 4.5p seemed reasonably clear. One can never be too sure about government gobbldegook. Thanks.

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29/7/2013 06:19:12

Glad that i have found you people. you have provided points differing from the present arrangements. the schematic diagrams were really helpful for me. the new method in feed-in tariff,the digression has been so useful for us. Regards.

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Feed-in Tariff consultation announcement

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