FiT for purpose?

The Department for Energy and Climate Change (DECC) last week ended years of lobbying, months of anticipation and a few weeks of anxiety for the micro-generation sector by announcing the rules and tarriffs for a new system of supporting small and micro-scale renewables, the Feed-in Tarriff (FiT).

FiT's work by offering a Government-backed and guaranteed price for electricity generated from power producers, a system which has been successfully used for at least a decade in other countries to stimulate growth in renewable energy development.

In the UK, commercial scale renewable energy has been supported by the Renewables Obligation (RO) since 2001, a 'carrot & stick' approach which requires electricity supply companies (ie. the folk who send you the bill!) to supply a set percentage of electricity from renewable sources to consumers. As such it is in the supply companies' interest to contract to buy electricty from renewable generators or develop their own green capacity, which is why the big utilities are the major developers in the market.

Small projects (typically less than 5MW installed but down to domestic solar panels and wind turbines) have also been supported under the RO alongside a mish-mash of capital grant schemes, but neither have really provided sufficient market stimulus or caught the public's attention at a scale beyond dedicated early adopters and self builders. The FiT is therefore game-changing for this sector, being ultimately designed to yield a ca. 5-8% tax-free return across the various technologies supported - a relatively low risk investment which many a financial adviser might struggle to match in the current market.

Take solar PV. A retrofitted 4kW system might cost £20k to install, yet produce around 3,200kWh of electricity per year - not far short of the UK average domestic electricity consumption. For this the FiT would pay 41.3p for each kWh generated, giving a 'FiT' annual income of £1,322. About 60% of the electricity generated would by used within the property, avoiding the use of 'imported' electricty at 10p/kWh, so this is worth £192 annully. The remaining 40% is exported at guaranteed price of 3p/kWh, worth £38. So the annual total is £1,552; not bad for a £20k investment, plus an uplift in the value of the house.

Expect your local electricity supplier to offer to install solar PV panels alongside a new electric shower and a house re-wire in your next bill...!

Details of the FiT can be found here on DECC's website.

Merkins Wind Farm - First Public Meeting

Consultation and public engagement are so very important to good planning, whatever the subject matter. Over the past year greater direction has come from the government on the requirements for public consultation for larger schemes, including proposed wind farms over 20MW in size. Pretty much all the developers we know in the wind industry carry out consultation and engagement activities in excess of the guidelines and usually apply it to schemes under 20MW as well. Its a matter of best practice and good professionalism.
Last evening the first public information evening in respect of the Merkins Wind Farm proposal took place in Gartocharn. Despite the inclement weather conditions some 30 people attended to hear Steve's presentation on the project, the work undertaken so far and our plans to be in a position to complete the Environmental Impact Assessment and submit a planning application in Summer 2010. A lengthy and interesting Q&A session followed the presentation. We shall also be carrying out similar public information in neighbouring communities.

Beauly-Denny green light...

BBC Radio Scotland ran a phone in this morning over the long awaited Beauly Denny power line upgrade decision which was made today. Of course opponents jammed the lines, the debate often transgressing to the well worn (and discredited) rants against onshore windfarms and renewable energy policy in general.
I didn't get through...so this is what I wanted to say to if I had:

Myth 1: Wind doesn't work when we most need it, ie now!
Answer: From the actual output data of operating windfarms I am involved with, they certainly have been generating lots of electricity during the recent cold spell! This myth is often rolled out by objectors at times of crisis, but nobody in our industry is advocating wind as the sole source of our energy needs; the balancing capacity is already there and will continue to be there.

Myth 2: We need nuclear...it's most reliable.
Answer: Since when was uranium mined in Scotland? The UK? At risk of opening this can'o'worms, let's just say the Scotland givernment is currently saying no to future nukes; it's not on the agenda north of the border. And why should it be when we are blessed with our own natural resources to generate more power than we need?

Myth 3: Let's build big hydro again to meet our renewable needs!
Answer: Good idea, but fraught with environmental difficulties. Let's not forget that onshore wind capacity built in the last decade now produces more eletricity than hydro capacity built in the last century...but we do need both.

The decision is a good one for the renewables industry and shows real political action over rhetoric. As far as the undergrounding question goes, the Scottish Government in its statement on the decision makes it clear that it has no legal powers to enforce undergrounding - so why the apparent confusion?

Welcome to our blog...

I must admit that the launch of our new website, this blog and the imminent submission of another two wind farm planning applications is entirely accidental timing alongside the crescendo building at the Copenhagen summit (COP15) and renewable energy hitting the headlines again!

Yet for all the media coverage of Climate Change, depletion of fossil fuels and the balance of energy independance in the UK moving beyond our control, I often wonder whether more can be done to promote the link between these factors and the real opportunities we have to further develop our renewable energy industry in the UK.

As a small independant developer in an industry which is rapidly maturing, we're certainly keen to play our part in putting that message across through this blog. In doing so we'll be sharing our thoughts on energy politics, technologies, our detractors, and any other stuff we just want to get down on a post which makes a contribution to the debate! We hope you enjoy our blog and look forward to your feedback.