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Sector pays tribute to “consistent policy mechanism”
The Renewable Energy Association (REA) has lamented the end of the Renewables Obligation, which closed its doors to new generating capacity today.
The REA hailed the subsidy scheme as the “single most important policy” to support the rapid growth of renewable electricity in the UK.
According to Ofgem, more than 23,500 generating stations comprising 25GW of installed capacity have been accredited under the scheme, including 9.3GW onshore wind, 5GW offshore wind and 5.3GW solar PV.
During 2015/16, 90.4 million Renewable Obligation Certificates (ROCs) were issued on the basis of 69.1 TWh of renewable electricity generation.
And last year, almost a quarter (23.4 per cent) of electricity was generated by obligation-accredited power stations, compared to 1.8 per cent for feed-in-tariff supported schemes.
The REA’s head of policy and external affairs, James Court, said the “stable” and “consistent policy mechanism” has helped the UK’s renewables industry grow over recent years.
“Without the obligation, the industry is left with the Contracts for Difference (CfD) mechanism,” said Court. “While this does support new generation, auctions take place at unpredictable intervals and the policy is prone to government directly picking winners.
“One of the best characteristics of the obligation was the fact you knew when you could build a project under the scheme,” he insisted.
“By setting out a timetable for future CfD auctions, government could go some way towards addressing some of these concerns, at no extra cost.
“Renewables, such as solar and onshore wind are already the cheapest form of electricity in many situations and are tantalisingly close to being able to be built with no direct subsidy, but in the meantime, they need support to get over that final hurdle.”
The head of renewable generation at Ofgem E-Serve, Luke Hargreaves, said the closure of the scheme will not affect capacity.
“The obligation scheme will run for another 20 years,” said Hargreaves.
“We will continue to issue ROCs and monitor compliance on a scheme that is worth in excess of £4.5bn a year. We will also determine any applications made prior to closure and any subsequent grace period applications.
“Any scheme participant wishing to make changes to their accredited installation should refer to our Guidance for Generators on our website.”
Energy minister Jesse said the government “remains fully committed to cleaning up our energy system and our support will continue through the more competitive CfD scheme”.
“This is designed to drive down costs and give companies the support and certainty they need to attract investment and get new projects off the ground,” added Norman.
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