The government has confirmed that it will not raise the ceiling for feed-in tariff (FiT) payments from 5MW to 10MW as part of its community energy strategy.
The Department of Energy and Climate Change (DECC) said that it could not raise the feed-in tariff because it believes that it would fall foul of EU state aid rules. DECC said: “Any notification to the Commission to increase the ceiling to 10MW would trigger the need to implement broader modifications to the FiTs scheme to comply with the EEAG. We consider that this would be likely to have significant consequences for support available to all sub 5MW projects as the capacity thresholds would have to be reduced.”
However, the government has announced a raft of other proposals to help boost community energy deployment. DECC has widened its definition of ‘community organisation’ to now include registered charities and any of their wholly owned subsidiaries. The government claims that this will make it possible for more groups to access community FiT provisions.
In another attempt to encourage community deployment, the government has confirmed that it will allow two projects to share one grid connection as long as one of the projects is community-owned. The two projects will be able to share a grid connection and receive separate tariffs under the FiT. DECC states that two connections will be the maximum and that both parties would have to access support under the FiT scheme. As a result, the two projects can be sized up to a maximum of 5MW each.
Commenting on the announcements, REA community engagement adviser Gaynor Hartnell said: “This creates a powerful incentive, especially for solar project developers, to co-develop schemes with community groups, in just the scenario Ed Davey envisaged when the Community Energy Strategy was published.
“The two parties could share costs on planning and grid connection and follow the split asset model, as set out by the Shared Ownership Taskforce in its recent report.”
The government also confirmed that community projects can now be guaranteed a FiT rate for an extra six months to help build certainty.
Attending Harvey’s Brewery in East Sussex, which has just had solar installed thanks to a community energy scheme, Ed Davey the energy and climate change secretary also announced the launch of a new Urban Community Energy Fund.
The £10 million fund will offer grants of up to £20,000 and loans of up to £130,000. Commenting on the fund, Davey said: “I want to give more people the power to generate their own electricity and by supporting community energy projects we can – helping them drive down their energy bills at the same time.
“That’s why we’ve pledged £10 million, so communities can play their part in generating renewable power at a local level. This is all about investing in renewable energy sources, creating jobs and changing the way renewable energy is developed in the UK.”
The spate of community announcements follows the publication of the Shared Ownership Taskforce which outlined a framework for community groups in the UK to be offered the right to invest in new, local renewable energy projects.