The Department of Energy and Climate Change (DECC) has announced the results of February’s Phase 2B consultation today to mixed industry reaction.
Renewable UK provided the most damning assessment of the announced changes, with the trade association’s Small & Medium Wind Development Manager, Indre Vaizgelaite, condemning the cuts passed down to small-scale wind: “We are deeply disappointed that the Government has chosen to put the brakes on a sector which had the potential to employ up to 9,000 people by 2020. Small wind has been a UK success story – many of the world's major manufacturers are based here, and there is a thriving export market.”
He continued: “The industry was committed to bringing costs down, but had made the case that this should be done over a two year period, to allow production to ramp up and deliver economies of scale. Instead these cuts have been introduced with just a few months' notice after a long period of uncertainty for our UK manufacturers.
“There is now a real risk that these jobs will go overseas – an unnecessary risk. Small wind was in no danger of overshooting the deployment trajectory the DECC had set for it, with 95 percent of FiT payments going to other technologies, making this decision even more puzzling.”
However, the Renewable Energy Association took another view as Paul Thompson, Head of Policy, welcomed the news: “These decisions demonstrate that DECC has listened carefully to industry concerns, and should restore certainty to the sub-5MW sector. We particularly welcome the support for community schemes and the improvements to the cost control mechanism. The introduction of tariff guarantees for projects at a relatively early stage is also very helpful, and we look forward to a similar approach being extended to the Renewable Heat Incentive.”
Dave Sowden, Chief Executive of the Micropower Council echoed Thompson’s sentiments, stating: “We welcome what is broadly a very positive set of proposals that should bring greater confidence to investors and customers. The final conclusions are very much in line with what we campaigned for, and we are particularly pleased with Government’s constructive engagement with the industry on this final part of the review.
“In particular the decision to increase the export tariff, the community proposals, the decision not to extend energy efficiency requirements beyond PV, the recognition of the strategic importance of microCHP and the lifting of its previous volume cap are welcome developments. We are however disappointed that the Government has not accepted the case for a generation tariff of at least 15p /kWh for microCHP as we believe this to be the minimum level needed to this technology a much-needed boost.
The microCHP industry saw support for the technology increase, as the FiT generation rate was raised to 12.5p/kWh. In a joint statement, the directors of the three industry bodies that have jointly campaigned for the changes said: “The microCHP industry welcomes the modest increase in tariff and the removal of the cap as the Government’s endorsement of the strategic importance of microCHP. This technology is the only one to receive an increase in tariff in this round, but we are disappointed that the Government has not accepted that the tariff needs to be at least 15p/kWh to make a significant difference”.
The statement concluded: “MicroCHP is one of the few low-carbon technologies where the UK has early mover advantage and we urge the Government to take further steps to preserve this competitive position. We look forward to working with Government to maximise the opportunity for this product which can make an important contribution to the creation of a low-carbon economy in the UK.”
