feed-in tariffs reform package - Regensw
FEED-IN TARIFFS REFORM PACKAGE Rachel Solomon Williams, DECC 17 APRIL 2012
PURPOSE OF THE FITS SCHEME
• Provides support for small-scale solar PV, hydro, AD, wind, µCHP • Aims to drive uptake of decentralised energy and engage communities and individuals with the green agenda • Started up in April 2010, using powers established under 2008 Energy Act 2
HOW FITS ARE FUNDED
• Generators are paid by electricity suppliers • Generation tariff plus export tariff
• Suppliers recoup costs through bills • Cost is defined as “imputed tax” and DECC is responsible for managing budget 3
BACKGROUND TO REVIEW
• Launched in Feb 2011 • Aims: – Addressing short-term cost overruns in PV (fast-track + phase 1) – Putting in place more robust cost control systems for the future – Considering tariffs and administration for all technologies 4
9 FEB PACKAGE OF PUBLICATIONS
• Solar PV – confirmation of approach on tariffs and energy efficiency for 1 April • Consultation on PV cost control
• Separate consultation on tariffs for other technologies and on various scheme management issues
5
NEW PV TARIFFS
• Reduced on 1 August 2011 for >50kW • Reduced for 4-10kW >10-50kW >50-100kW >100-150kW >150-250kW >250kW-5MW stand alone
Current generation tariff (p/kWh) 37.8 43.3 37.8 32.9 19 19 15 8.5 8.5
Generation tariff from 1 April (p/kWh) 21.0 21.0 16.8 15.2 12.9 12.9 12.9 8.9 8.9
Multiinstallation tariff (p/kWh) 16.8 16.8 13.4 12.2 10.3 10.3 10.3 8.9 8.9 7
Phase 1 decisions: Energy efficiency requirement
1. Applies to domestic and non-domestic solar PV installations with an eligibility date from 1 April 2012 2. A valid EPC showing a rating of at least D must be submitted with the application for FITs payments in order to receive the standard tariffs (21p/kWh for 4-10kW
16.8
10.9
12.6
13.2
>10-50kW
15.2
9.9
11.4
11.9
>50-150kW
12.9
7.7
9.7
10.1
>150-250kW
12.9
5.8
8
10.1
>250-5000kW
8.9
4.7
6.8
7.1
Stand alone
8.9
4.7
6.8
7.1
13
Phase 2A: Degression proposals
• Proposes automatic ‘baseline’ degression of: – 5% in October 2012 – 10% every 6 months thereafter
• Plus a ‘contingent’ degression mechanism triggered by deployment: – if deployment exceeds 125% of the projected level – the next automatic degression step is applied 2 months later (unless it was due to come in within 2 months in any case) – based on published data, available to everyone 14
Phase 2A: Tariff lifetime, indexation, and export tariffs
The consultation also sought views on whether: – the tariff lifetime should be reduced from 25 to 20 years
– tariffs should remain index-linked – the level of the export tariff – the multi-installation tariff should remain at 80% of standard tariffs
– the tariff for installations that do not meet the energy efficiency requirement should be equivalent to the stand-alone rate 15
Phase 2B proposals: Basis for tariffs
• Revisit costs based on latest information • Generally no increase to tariffs • 21p cap proposed across all technologies
• Largest scale installations maintained at RO parity at 5 MW crossover (therefore subject to outcome of RO banding review)
16
OTHER TECHNOLOGIES – TARIFF PROPOSALS Technology
Current tariffs (p/kWh) from 1/4/12
Proposed tariffs (p/kWh) from 1/10/12
≤250
14.7
14.7
>250-≤500
13.7
13.7
>500-≤5000
9.9
9.0
≤15
22.0
21.0
>15-≤100
19.7
19.7
>100-≤2000
12.1
12.1
>2000-≤5000
4.9
4.5
Micro-CHP
≤2 kW
11.0
12.5
Wind
≤1.5
35.9
21.0
>1.5-≤15
28.1
21.0
>15-≤100
25.4
21.0
>100-≤500
20.7
17.5
>500-≤1500
10.4
9.5
>1500-≤5000
4.9
4.5
AD
Hydro
Capacity (kW)
17
Phase 2B proposals: Degression and cost control
All technologies should be subject to a tailored version of the cost control regime proposed for PV technologies, including annual automatic degression and capacity triggers: Minimum degression of 5% starting in April 2014 Capacity triggers for Hydro, Wind and AD installations No capacity triggers beyond 2014/15 18
Phase 2B proposals: Preliminary accreditation
•
Preliminary accreditation – Which projects should be eligible? – At what stage would projects be eligible? • Planning? • Permitting? • Grid? – Should tariffs be guaranteed? • How long the guarantee of tariffs should last • How do we discourage speculative applicants? – How close to the original application should it be to still qualify for benefits of pre-accreditation? Use it or lose it?
19
Phase 2B proposals: Accreditation and administrative issues
Accreditation issues: •
Definition of “site”
•
Accreditation of micro-hydro installations
•
Equivalent to MCS
•
Use of second hand equipment
Other issues including administration of scheme: •
Definition of “community” and ways of applying the definition
•
Should energy efficiency requirement be extended to other technologies?
•
Ofgem powers
•
Data management
•
Administration of scheme/issues around fraud
Phase 2 consultation closes 26 April 20
www.decc.gov.uk/FITS
[email protected]
21
THANK YOU
PURPOSE OF THE FITS SCHEME
• Provides support for small-scale solar PV, hydro, AD, wind, µCHP • Aims to drive uptake of decentralised energy and engage communities and individuals with the green agenda • Started up in April 2010, using powers established under 2008 Energy Act 2
HOW FITS ARE FUNDED
• Generators are paid by electricity suppliers • Generation tariff plus export tariff
• Suppliers recoup costs through bills • Cost is defined as “imputed tax” and DECC is responsible for managing budget 3
BACKGROUND TO REVIEW
• Launched in Feb 2011 • Aims: – Addressing short-term cost overruns in PV (fast-track + phase 1) – Putting in place more robust cost control systems for the future – Considering tariffs and administration for all technologies 4
9 FEB PACKAGE OF PUBLICATIONS
• Solar PV – confirmation of approach on tariffs and energy efficiency for 1 April • Consultation on PV cost control
• Separate consultation on tariffs for other technologies and on various scheme management issues
5
NEW PV TARIFFS
• Reduced on 1 August 2011 for >50kW • Reduced for 4-10kW >10-50kW >50-100kW >100-150kW >150-250kW >250kW-5MW stand alone
Current generation tariff (p/kWh) 37.8 43.3 37.8 32.9 19 19 15 8.5 8.5
Generation tariff from 1 April (p/kWh) 21.0 21.0 16.8 15.2 12.9 12.9 12.9 8.9 8.9
Multiinstallation tariff (p/kWh) 16.8 16.8 13.4 12.2 10.3 10.3 10.3 8.9 8.9 7
Phase 1 decisions: Energy efficiency requirement
1. Applies to domestic and non-domestic solar PV installations with an eligibility date from 1 April 2012 2. A valid EPC showing a rating of at least D must be submitted with the application for FITs payments in order to receive the standard tariffs (21p/kWh for 4-10kW
16.8
10.9
12.6
13.2
>10-50kW
15.2
9.9
11.4
11.9
>50-150kW
12.9
7.7
9.7
10.1
>150-250kW
12.9
5.8
8
10.1
>250-5000kW
8.9
4.7
6.8
7.1
Stand alone
8.9
4.7
6.8
7.1
13
Phase 2A: Degression proposals
• Proposes automatic ‘baseline’ degression of: – 5% in October 2012 – 10% every 6 months thereafter
• Plus a ‘contingent’ degression mechanism triggered by deployment: – if deployment exceeds 125% of the projected level – the next automatic degression step is applied 2 months later (unless it was due to come in within 2 months in any case) – based on published data, available to everyone 14
Phase 2A: Tariff lifetime, indexation, and export tariffs
The consultation also sought views on whether: – the tariff lifetime should be reduced from 25 to 20 years
– tariffs should remain index-linked – the level of the export tariff – the multi-installation tariff should remain at 80% of standard tariffs
– the tariff for installations that do not meet the energy efficiency requirement should be equivalent to the stand-alone rate 15
Phase 2B proposals: Basis for tariffs
• Revisit costs based on latest information • Generally no increase to tariffs • 21p cap proposed across all technologies
• Largest scale installations maintained at RO parity at 5 MW crossover (therefore subject to outcome of RO banding review)
16
OTHER TECHNOLOGIES – TARIFF PROPOSALS Technology
Current tariffs (p/kWh) from 1/4/12
Proposed tariffs (p/kWh) from 1/10/12
≤250
14.7
14.7
>250-≤500
13.7
13.7
>500-≤5000
9.9
9.0
≤15
22.0
21.0
>15-≤100
19.7
19.7
>100-≤2000
12.1
12.1
>2000-≤5000
4.9
4.5
Micro-CHP
≤2 kW
11.0
12.5
Wind
≤1.5
35.9
21.0
>1.5-≤15
28.1
21.0
>15-≤100
25.4
21.0
>100-≤500
20.7
17.5
>500-≤1500
10.4
9.5
>1500-≤5000
4.9
4.5
AD
Hydro
Capacity (kW)
17
Phase 2B proposals: Degression and cost control
All technologies should be subject to a tailored version of the cost control regime proposed for PV technologies, including annual automatic degression and capacity triggers: Minimum degression of 5% starting in April 2014 Capacity triggers for Hydro, Wind and AD installations No capacity triggers beyond 2014/15 18
Phase 2B proposals: Preliminary accreditation
•
Preliminary accreditation – Which projects should be eligible? – At what stage would projects be eligible? • Planning? • Permitting? • Grid? – Should tariffs be guaranteed? • How long the guarantee of tariffs should last • How do we discourage speculative applicants? – How close to the original application should it be to still qualify for benefits of pre-accreditation? Use it or lose it?
19
Phase 2B proposals: Accreditation and administrative issues
Accreditation issues: •
Definition of “site”
•
Accreditation of micro-hydro installations
•
Equivalent to MCS
•
Use of second hand equipment
Other issues including administration of scheme: •
Definition of “community” and ways of applying the definition
•
Should energy efficiency requirement be extended to other technologies?
•
Ofgem powers
•
Data management
•
Administration of scheme/issues around fraud
Phase 2 consultation closes 26 April 20
www.decc.gov.uk/FITS
[email protected]
21
THANK YOU
