The uk renewable energy incentives 2011 2012


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An update for 2011/12 explaining the principles and aims behind the UK government's subsidies for alternative energy projects, and the changes made by the UK government to their renewable energy incentives in the recent past.

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The uk renewable energy incentives 2011 2012

  2. 2. THE UK RENEWABLE ENERGY INCENTIVES STEVE The UK Renewable energy Incentives An Update: Including Changes For 2011/12 THE UKs Coalition Government is committed to establishing improved long-term energy security for the nation by incentivising an increase in the implementation of renewable energy throughout the UK. Their stated aim is to increase renewable energy output in the of electricity, heat and transport sectors; to achieve 15 percent of its energy demand being met from renewable sources by 2020, and it has pledged to do this in the most cost-effective way. In addition to the UK target, the devolved administrations have also set themselves more ambitious national targets: the Scottish Government has introduced a target to deliver 100 percent renewable electricity by 2020; the Northern Ireland Executive has a target to deliver 40 percent STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 2
  3. 3. THE UK RENEWABLE ENERGY INCENTIVES STEVE renewable electricity and 10 percent renewable heat by 2020; and the Welsh Government has indicated that it has the potential to produce twice the amount of electricity it currently uses from renewable sources by 2025 and to deliver 4GVV of this from marine energy. So, how are they doing this? Renewables Obligation THE RENEWABLES Obligation (RO) This scheme is designed to incentivise renewable electricity generation. It is currently the main mechanism to enable renewable electricity generation to compete effectively with fossil fuel generation, by providing support in addition to the electricity price. The RO obligates licensed electricity suppliers to source a specified and increasing percentage of their electricity sales from renewable sources. The RO is administered by the Gas and Electricity Markets Authority (the day-to-day functions of which are performed by Ofgem). Every operator of a qualifying renewable energy power source applies for a ROC (Renewables Obligation Certificate). The Renewables Obligation Certificate (ROC) is a certificate, issued by Ofgem, to accredited renewable electricity generators, for any eligible renewable electricity that is generated. To meet their obligations, suppliers can present Ofgem with enough ROCs or make a buy-out payment. The buy-out price sets the rate which suppliers need to pay if they do not present sufficient numbers of Renewables Obligation Certificates (ROCs) to meet their obligations under the scheme. They can also use a combination of ROCs and buy-out to meet STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 3
  4. 4. THE UK RENEWABLE ENERGY INCENTIVES STEVE their obligations. The buy-out price was £30 per MWh in the base year, 2002/03. In 2011/12 it is £38.69. Since being introduced in 2002, the RO has increased the level of renewable electricity generation in the UK from 1.8 percent to 6.64 percent. During 2009/10 the scheme was valued at approximately £1.42bn per year in support to the electricity industry. In April 2010, the Government extended the end date of the RO from 2027 to 2037, providing increased long-term certainty for investors. In July 2011 the Coalition Government published a UK Renewable Energy Roadmap, setting out its approach to unlocking renewable energy potential. What Renewable Sources are Eligible for ROCs? Under the Renewables Obligation the following energy sources are eligible: landfill gas sewage gas hydro (for installations exceeding 20MW declared net capacity only those commissioned after 1 April 2002 are eligible) on-shore and off-shore Wind co-firing biomass other biomass geothermal power tidal & tidal stream power STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 4
  5. 5. THE UK RENEWABLE ENERGY INCENTIVES STEVE wave power photovoltaics energy crops energy from waste (see Table for clarification). In addition to being an approved source, all installations must be located within the UK, its territorial waters or the Continental Shelf. Also, only stations initially commissioned or re-equipped on or after 1 January 1990 (apart from micro-hydro and co-firing stations) are eligible. All combined heat and power (CHP) installations must be accredited under the CHP Quality Assurance Scheme to be eligible. Schemes that comply fully with the Good Quality benchmark receive ROCs on the electricity generated from the biomass fraction of the waste. For schemes that comply partially, this is scaled back depending on their efficiency. Banding The rules of banding have been changed. Previously, one ROC was issued for each MWh of eligible renewable electricity output generated. However, from 1 April 2009, "banding" was introduced, where different technologies receive different levels of support dependant on their costs and potential for large-scale deployment (ie onshore wind receives one ROC/MWh while energy crops receive two ROCs/MWh). On 20 October 2011 DECC released a consultation on levels of banded STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 5
  6. 6. THE UK RENEWABLE ENERGY INCENTIVES STEVE support under the renewable obligation banding review 2013/17. Some of the key changes for the resource and waste management sector are reduced support for standard pyrolysis and gasification, energy from waste with CHP and landfill gas. Bioliquids are being proposed as eligible for the same number of ROCs as biomass, this includes fossil derived bioliquids. To ensure that bioliquids are not diverted from other uses of greater priority (eg transport) a cap on the use of bioliquids is being proposed at four percent of each suppliers renewables obligation. There is a proposal to replace the current standard and advanced gasification and pyrolysis bands with two new bands. This is to distinguish between more proven steam cycle technologies and those that are more innovative using more efficient engines or gas turbines. CHP uplift for new stations on or after 1 April 2015 and new build CHP will be supported through a combination of RO and Renewable Heat Incentive, this proposal will be supported with CHP capacity added between 1 April 2013 and 31 March 2015 being able to choose power only RO bands plus RHI or RO CHP band. There is also a further proposal to grandfather CHP under the RO from 1 April 2013. STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 6
  7. 7. THE UK RENEWABLE ENERGY INCENTIVES STEVE Further Information UK Renewable Energy Roadmap: ergy/2167-uk-renewable-energy-roadmap.pdf Source: This newsletter is based upon the CIWM’s Fact File “Incentivising Renewables” 2011/12. Latest News (May 2012) Government Announces Landmark Green Investment The Government’s UK Green Investments team (UKGI) is to make its landmark first investment in green infrastructure. STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 7
  8. 8. THE UK RENEWABLE ENERGY INCENTIVES STEVE A total of £80 million has been committed to two specialist fund managers who will make and manage investments in the small scale waste infrastructure sector on behalf of the Department for Business, Innovation and Skills. An initial fund of £50 million will be managed by Foresight Group and an initial fund of £30 million managed by Greensphere Capital. All BIS investments made by the fund managers will be match-funded, leveraging in at least £80 million more to the projects. The investment decisions will be overseen by a new Investment Committee. The Government is investing directly, on fully commercial terms, ahead of obtaining state aid approval for the UK Green Investment Bank (GIB). The fund managers will be responsible for generating and managing investments in areas such as waste recycling and reprocessing facilities, pre-treatment projects and energy-from-waste projects. The appointments have been made following the launch of a competition in December 2011 seeking experienced fund managers to manage Government investments in waste infrastructure projects. The Government will also make a further £100 million available for investment in the non-domestic energy efficiency sector. More at: UK Government announces landmark green investment Disclaimer Reasonable care has been taken to ensure that the information presented in this newsletter is accurate. However, the reader by reading this newsletter shall be deemed to have read and accepted the following terms: Terms of Use: No Liability: this book is supplied “as is” and without STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 8
  9. 9. THE UK RENEWABLE ENERGY INCENTIVES STEVE liability. All warranties, express or implied, are hereby disclaimed. The information provided does not constitute advice of any kind. © 2012 by IPPTS Associates. STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 9
  10. 10. THE UK RENEWABLE ENERGY INCENTIVES STEVE Are You Receiving Your Anaerobic Digestion News? Its Free! Latest Biogas News by email. It’s UK centred, but with Developments Worldwide Sign up for our biogas news blog, and we will send you an email version of each blog article every time we update our blog. STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 10
  11. 11. THE UK RENEWABLE ENERGY INCENTIVES STEVE We been running it since 2006, and we have over 900 subscribers. Yes. It’s also completely free, and we always include an “unsubscribe” button in every email, so unsubscribing is never more than a click away. If you would like to give it a try, just click on the link below, and fill out the simple form. (Tip: If your settings prevent this working, copy and paste the link text into you browser’s address panel.) STEVE INFO@ANAEROBIC-DIGESTION.COM - HTTP://ANAEROBIC-DIGESTION.COM 11Powered by TCPDF (