DECC has issued a number of new consultations today that will continue to shake up the electricity market. These are:
- Changes to financial support for solar PV
- Support for community energy projects under the Feed-in Tariffs scheme
- Electricity Market Reform: further consultation on allocation of Contracts for Difference
Changes to financial support for solar PV
Large-scale solar PV deployment is rapidly out-stripping the affordable levels set out in the EMR delivery plan. DECC wishes to realign funding support to rooftop deployment (industrial and domestic) and are therefore proposing to split the current ‘degression band’ for projects over 50kW under FITs into two: one for standalone, one for non-standalone. In other words, tariffs for building-mounted solar panels would reduce at a slower rate than for ground-mounted solar panels. This gives rooftop-mounted schemes access to more of the financial support available through FITs.
More drastically, DECC are also proposing that the Renewables Obligation is closed to new solar PV capacity above 5MW from 1st April 2015. The proposals include grace period arrangements to protect developers who have already made significant financial commitments.
Support for community energy projects under the Feed InTariffs scheme (FITs)
Further to an earlier announcement, the latest round of consultations also include proposals to increase the maximum capacity for community anaerobic digestion, hydro, onshore wind and solar PV projects from 5MW to 10MW under the FITs scheme.
Electricity Market Reform – allocation of CfDs
DECC has confirmed that the budget for CfDs will be divided into groups: (a) established technologies and (b) less established technologies.
Technologies in the established group are: onshore wind greater than 5MW; solar photovoltaic greater than 5MW; energy from waste with combined heat and power (CHP); hydro between 5MW and 50MW; landfill and sewage gas.
The technologies compete under constrained allocation rounds, where strike prices are bid below the published price.
Less established technologies are: offshore wind; wave and tidal stream; advanced conversion technologies; anaerobic digestion; dedicated biomass with combined heat and power and geothermal.
These technologies will only move to auctions if there are more applicants for CfDs than are affordable within the budget.
Importantly for the Scottish market, DECC are consulting on the possibility of treating Scottish Islands onshore wind projects as either part of the “less established” technology group, or as a separate technology group.