What’s wrong with Feed in Tariffs?
I discussed Feed in Tariffs with David Cameron at our Reading turbine last week. The Tories have a policy proposal to introduce Feed in Tariffs – to do something about the lack of progress we’re making with Renewable Energy in the UK. But I don’t think this will help at all.
(Feed in Tariffs - FITs - are a system of fixed prices for renewable energy paid to the generator by the ‘grid company’. The fixed price is above the ‘market’ price and hence provides financial support to enable more renewable capacity to be built.)
So what’s wrong with Feed in Tariffs?
Well, actually nothing. It’s a good way to financially support renewable technologies and so encourage their wider use. It’s worked brilliantly in Germany.
But do they have anything to offer the UK? That’s a different question altogether and my answer to that is a definite no. The reasons are simple enough -
Feed in Tariffs are the right answer to the wrong question.
The UK RO (Renewables Obligation) scheme does the same job. It provides support above that which the ‘market’ alone would give.
FITs work well, so does the RO. The RO is not the problem, so swapping it for FITs won’t achieve anything.
The dominant renewable technology in the UK is on shore wind - it’s technically mature, in mass production and it’s economic. We have enough of it to power the whole country several times over (we have 40% of Europe’s wind resource), and it’s expected to deliver the lion’s share of our renewable targets.
Does it need additional financial support? No, it does not. The government only recently resisted the temptation to reduce the support that wind currently gets through the RO – the trend here is reduced support not increased, because wind clearly has what it needs.
The one thing preventing the UK from having a massive contribution to energy needs from our wind resource is the planning system. And FITs won’t and can’t fix that. Feed in Tariffs are about financial support and that is not the problem. It’s really that simple.
There are technologies other than wind of course, like wave power for example, and they need more support (money) to work than wind does, but they are getting this through the existing RO mechanism – which is now giving multiple ROCs (Renewable Obligation Certificates) to certain technologies, like wave and tidal power. It’s as effective as feed in tariffs at this job.
Feed in Tariffs were a great idea 15 years ago and would have helped the UK then, but we finally got our act together with the RO some years ago (it’s our Feed in Tariff by another name) – and our problems today are not money, they are planning – only planning. Let’s discuss instead adopting German planning laws – now there’s an idea David….
You can now see part two in this series on Feed-in Tariffs here.
Thanks for that, but…
I agree only if you are talking about larger projects, unless you’d be prepared to provide larger ROC payments for microgeneration to get people involved. For example, you/Ecotricity are only paying me 4.5p/kWh (incl VAT) for my PV microgenerated power even though we generated significantly more than we consumed yesterday and we’ve made heavy investment in efficiency and generation here at home to get there. Where’s the incentive in 4.5p? Why not more like the 20p/kWh elsewhere in the EU and/or officially supporting net metering?
(Not that I’m complaining about the rate per se, but in the absence of claiming grants my pockets are only so deep!)
Don’t forget getting ‘mindshare’ from individuals, not just bulk RE…
Rgds
Damon
Comment by Damon Hart-Davis — April 18, 2008 @ 7:43 am
Big scale Renewables are far far more economic, and therefore sustainable, in terms of material use per energy output - and so it’s where the biggest efforts should go (the world is getting shorter of materials). But I’m a big believer in getting people involved, that’s what we’re trying to do, and microgeneration is, after all ’something you can try at home’ - it’s a good thing to do.
Cheers.
Comment by dale — April 21, 2008 @ 7:53 am
Rgds
Damon
Comment by Damon Hart-Davis — April 21, 2008 @ 2:03 pm
Comment by nommo — April 23, 2008 @ 9:17 am
The ad recreates an England vs Germany penalty shootout which Germany win 200 - 1 as Germany has 200 times the amount of Solar power mostly generated by FIT’s.
Get your MP to sign New Clause 4 in the Energy Bill to include a renewable energy reward. It’s gotta be worth it!
Comment by Wobbly Dave — April 23, 2008 @ 9:48 am
We will need a huge number of wind turbines to produce that amount -like covering all of the land space in the UK and much of the sea around - and this is even before we have begun switching to electric cars.
I am all for wind meeting a far greater proportion of our needs but let’s realise that it can come no where near meeting our total needs, even with substantial energy savings we have to embrace all options. It’s too late to be picky on what we use to reduce carbon.
Comment by martin — April 28, 2008 @ 1:30 pm
Comment by Jon Cowdrill — July 18, 2008 @ 8:37 am
Microgeneration *can* generate grass roots support and involvement, that’s true, it may be the only thing it has going for it - but feed in tariffs don’t per se.
I don’t know much about the Danish planning system but I do know that wind there didn’t get off the ground in such a big way because of feed in tariffs - it’s widely credited to be because of tax breaks that enabled communities to hold shares in wind turbines (big ones) and this lowered planning issues.
They have a saying in Denmark (a Wind guy once told me) “You only hear your neighbours dog barking”. In Germany too the reason for their great capacity in wind is not feed in tariffs causing grass roots support, its a more pragmatic attitude from the Germans about development bolstered by the fact that the market there started with individual farmers owning machines.
In both cases the market was driven by lots of small local owners and big developers were rare until relatively recently. In the UK the opposite is the case. Feed in tariffs lend support to large and small entities as does the RO - neither differentiates between them.
Cheers.
Comment by dale — July 18, 2008 @ 12:28 pm