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Government reconsiders stance on feed-in tariffs

The Government has signalled that it is ready to submit to industry demands to introduce feed-in tariffs (FiTs) – the procurement mechanism by which householders are paid premium rates for any green energy they sell to the National Grid.

 

The move was confirmed by a spokesperson from the Department for Business, Enterprise and Regulatory Reform (BERR) who said: “We will be publishing a renewables consultation paper this summer which will explore the ways by which we can increase and meet our share of the European Union’s (EU) 2020 renewable energy target.

 

“We remain committed to the Renewables Obligation (RO). However, we will be looking at a whole range of other measures. And yes, FiTs are one of the options being explored.”

 

The volte face comes less than six months after BERR dismissed Peter Ainsworth’s, the shadow environment secretary, pledge to introduce FiTs. At that time it said the UK would pursue its 15 per cent carbon reduction target through the RO scheme.

 

Under the RO, introduced by the Government in 2002, licensed UK electricity providers are obliged to source increasing amounts of energy from green sources, such as wind or tidal power.

 

The renewables industry and environmentalists, however, have argued that the RO, along with capital grants such as the £18 million Low Carbon Buildings Programme (LCBP), have been insufficient to deliver the widespread uptake of renewables required to meet the 2020 target.

 

The UK generates only 2 per cent of its energy via renewable energy sources, the lowest in the EU – just above Malta and Luxemburg .

 

Andrew Cooper, head of on-site renewables with the Renewable Energy Association, welcomed the consultation paper. “This will have a positive impact on the renewables market,” he said.

 

“FiTs have already had a huge impact in Germany where there are in excess of 300,000 solar PV panel installations. The UK has less than one hundredth of that figure. There is a thriving renewables industry in Germany, and FiTs could stimulate an even larger industry over here.

 

Jonah Andrews, policy director with the Micropower Council, was more circumspect. “We certainly support the discussion surroundings FiTs. Nonetheless, there are details that need to be ironed out before the mechanism is introduced into the UK market,” he said.

 

“The German model is very different from the UK’s, and we should not get too carried away until we see what’s on the table. We need to make sure that we don’t create a false dawn. We want to see the right regulations in place first.”

 

“What we don’t want to see is huge upheaval in the sector, and what’s promised and needed is not delivered. We need to concentrate on getting the details right first.”

 

Ed Matthews, Friends of the Earth’s economics campaigner, said the Government should strengthen the Energy Bill – which has entered the Committee stage in Parliament – by including provision for FiTs. “The problem with consulting on FiTs in the summer is that there’s this delay. It will take at least another year before any decision is made, and the UK really needs to get on with this right away. It is behind the majority of Europe and is in danger of falling even further behind.”