This is a follow-on post from my ‘What’s Wrong With Feed-in Tariffs’ posting earlier.
It’s not un-common to hear people say ‘We need Feed in Tariffs in the UK, like they have in Germany – they’ve got umpteen Gigawatts of renewables from it’. And fair enough they do. It’s important not to confuse large scale FITs with micro though.
The problem for onshore wind (large scale) in the UK is planning not financial and therefore FITs just can’t help. We need German planning laws to emulate German success, in large scale wind.
But what about micro generation; Are feed in tariffs the answer to better deliver this?
Planning used to be a barrier to micro generation but no longer. The problem is just that the numbers don’t stack up. It’s a financial problem, the territory of FITs.
German FITs pay well for micro generation – more than 30p per unit. No wonder much more gets built there than here with our 10p or so. That’s how it works. It’s nothing to do with it being an easy system to use or anything else, just much more money.
But multiple ROCs would do the same job here. They recently doubled and it would be easy enough to have them quadruple (to emulate the value of German FITs) – much easier than to set up a new scheme. And here’s why.
Export from home generation cannot be economically metered, so the ‘system’ cannot attribute it to individual suppliers, it just reduces grid losses. FITs require an electricity distribution company to pay for the power, one who operates the grid – and who then passes on the cost to electricity suppliers working in that region. That’s how it works in Germany. It would be complex to set up and run – compared to multiple ROCs. And it would require new legislation, no small issue.
And would FITs for micro generation give us shed loads of renewables, like Germany? Well yes and no – it would be a boost, but let’s not overestimate how much they have in Germany – from micro gen. Germany’s incredible 12% renewables contribution is often described as coming from ‘wind and solar’ – giving the impression that solar (micro generation) plays a large part. It doesn’t.
Solar actually makes up 0.3% of Germany’s electricity – wind and other large scale renewables produce 11.7%. Put another way micro generation makes up just 4% of the electricity supported under FITs in Germany. It’s good but not as good as it’s cracked up to be.
FITs are good at stimulating micro generation simply because they pay well. Money is really what stimulates micro generation. FITs are a mechanism that works in Germany to provide that money, they could be made to work here but not easily. Whereas multiple ROCs could readily do the same job. The system and the legislation is in place and it works in a UK market context. There’s nothing clever about FITs, they just pay well. That’s easy to emulate. You’d think.
Our German friends do have something we lack – commitment to renewables. That’s what we need. German style commitment to Planning for large wind that works and Finance for micro generation that works.