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Friday 24 April 2009

DECC also warned that as the feed-in tariff is implemented, the small wind industry will have to get used to dealing with more diverse and demanding customers than it is typically used to

A government official has warned the small-scale renewables industry not to expect a "perfect" feed-in tariff when it is introduced in April 2010.

John Moriarty, from the Department of Energy and Climate Change (DECC), said on Tuesday that the tariff will "inevitably have problems" when it is implemented, but that the government will keep it under review.

Speaking at the International Small Wind Conference in Watford, hosted by the British Wind Energy Association (BWEA) over the last two days, Mr Moriarty urged the industry to have patience in the early days of the tariffs.

"Without being defeatist, there will inevitably be problems within the feed-in tariff in the UK . We'll need to review it and we'll need to make changes on an ongoing basis. Please don't expect our feed-in tariffs to be perfect from the start," he said.

UK model

Mr Moriarty, who is the head of feed-in tariff development at DECC, also defended the government's decision to seek a unique tariff design for the UK, instead of copying a European model.

He said: "We know that other countries have a feed-in tariff, we know we're not alone, and we're really keen to learn from other countries where we can. But I think it's fair to say that in the UK there is a rose-tinted view of the European feed-in tariff.

"There is a lot of good out there and a lot to admire, but there are features of other countries' feed-in tariffs that are not popular, and there are features that have not worked terribly well," he added.

Civil servants are working on plans for the feed-in tariff to work alongside the Renewables Obligation Certificate, something that European governments have not had to contend with.

And as the tariff is set to be capped at 5MW, to capture the householder, public sector and community renewables market, it will have to be accessible to people who are not necessarily energy experts.

Simplicity

The DECC official highlighted the complexity of the Portuguese feed-in tariff, and said that the UK wanted to "achieve a scheme which is simple and ready to operate by 2010".

"One of the messages we've received is ‘keep it simple', and we're trying to take that to heart," Mr Moriarty added. "If it's growth that the feed-in tariff delivers, then all of the small scale industries, not just wind, will have to consider how it will interact with a more diverse and demanding customer base that it has perhaps encountered in the past."

Mr Moriarty stressed that although the government had committed to implementing the feed-in tariff in April 2010, there were still a lot of issues to be discussed and consulted on before they can become operational.

DECC is currently analysing the design options for the feed in tariff, and assessing the impact and costs, which it will be presenting alongside the formal Renewable Energy Strategy consultation in the summer.

It is assessing how best to treat the producer of energy, who, under existing subsidy schemes, would have to negotiate a power purchase agreement with an electricity supplier.

It is also considering whether to tier or band the tariffs, and whether or not to make them technology-specific.

Mr Moriarty also expressed concern about "gaming", which could occur if the tariff was too complicated and people try to exploit the system.

This, he said, would require more policing and put costs up.

Chairing the session was Ben Madden, director of renewables consultancy Element Energy, who said: "The prospect of the feed-in tariff has shifted the debate. In the past people have sat in meetings getting very frustrated with government, waiting for the market incentives to be changed in a way that actually supports the industry for emerging technologies and small scale wind.

"But now the debate has shifted from ‘we need this' to ‘how do we do it right'."