Death of the Feed-in-Tariff
The Feed-in-Tariff was first introduced in the UK in April 2010 to act as a financial incentive for homes and businesses to take up renewable energy. Succesful applicants receive a payment for the clean energy they produce receiving a guaranteed fixed price, indexed for inflation for 20 years.
The Feed-in-Tariff (FIT) has been extremely successful at encouraging the take up of renewable energy. Most installations in the UK could not have happened without it.
Unfortunately, the FIT subsidy is set to end in April 2019. As set out by the Government in the 2017 Autumn budget, “there will be no new subsidies for renewables until 2025”.
So what does this mean for the future of renewables in the UK? Thankfully, a dramatic fall in costs since 2010 means that access to solar power is much more affordable than it was. As the costs to store energy using battery power technology decline the time is approaching where there will be no need for subsidies after all, though making this happen by April 2019 will be a challenge.
As the Feed-In-Tarff subsidy dimishes over the next year, solar power installers will be looking to use battery storage as a way of making new projects work financially. Being able to charge a battery with solar power means the electricity does not need to be consumed at the point of generation, instead it can be used when it’s needed, day or night. This could prove to be just the catalyst needed for wide-scale clean energy deployment.
Combining battery storage with renewable energy will unlock the door to using clean energy sources around the clock putting the final nail in the coffin for fossil fuels in our energy supply. Furthermore, in the same way that solar and wind power costs have plummeted, we can expect the price of battery storage to fall as production techniques improve and economies of scale take hold.
With falling costs, home storage is seen as increasingly attractive in the UK, particularly to early adopters, being the 850,000 homes with solar panels. The Tesla Powerwall, perhaps the best known energy storage battery, has recently become available in the UK, soon be challenged by a British made Nissan battery. Other British manufacturers are Powervault and Moixa. There have even been suggestions that electric vehicle batteries can be connected to the grid to sell extra power at peak times, adding another incentive to becoming an EV owner.
The energy market is certainly set for some rapid and profound changes in the years to come. In the last part of our Energy Trends blog series, we’ll look at the emerging popularity of heat pumps and how smart meter will change the way we buy power.
The Conservative budget announcement in July was not good news for the renewables industry, nor for members of the public who are concerned about climate change, rising energy prices and the impact that extreme methods of extracting oil and gas will have on our air, water and soil (1,2). Support for the renewable industry and tackling climate change appears be drying up at a time when we need them more than ever (3).
We see that there are cuts ahead, so that even large coal–fired power stations like Drax, who were seen as the UK’s worst carbon dioxide polluter, are complaining about how their transition to biomass is being undermined(4,5). Instead there is massive funding of taxpayers money pouring into the nuclear industry to support the construction of new nuclear power plants, decommissioning and the long-term management of its toxic waste legacy (6). We know that nuclear is not a solution for climate change or keeping the lights on as the problems are looming and it takes 15 years to build a nuclear power station. Then there’s tax breaks for the shale gas extraction industry(7), although most of us oppose “fracking” which creates numerous problems for local communities, wastes more taxpayers money because the protests against fracking in areas that are precious to us will not abate. Besides the obvious detriment to our environment, the untold clean-up costs after it’s sucked the last drop of ‘fracked’ gas from the ground beneath us (8,9) and the impact on our water supply.
We need to ask some questions; who benefits from these subsidies? How are the investments made by this government going to benefit us, the taxpayer, in the long-term? Are we receiving value for money on governments investment of our taxes and finally – Why aren’t they listening to us? Already we are paying too much for our energy. Even the Prime Minister, has moved on to the former Labour leader’s territory, and is considering a temporary cap on our fuel bills as a result of the monopolising power of just 6 big energy corporations controlling over 90% of the UK energy market (10). Unfortunately, this is only a plaster for the bigger problem, which is that our energy strategy that is not fit for purpose.
There are solutions to these problems. There is a growing movement of local community energy groups across the UK, particularly, social enterprises and co-operatives like BHESCo here in Brighton and Hove. By building our own renewable energy generation and improving the thermal efficiency of our built environment, we can take some of the power out of the hands of the big corporations inflicting price increases and reduce our energy costs, improve the energy efficiency of our homes, stimulate the local economy, tackle fuel poverty and contribute to mitigating the biggest global threat to our existence, climate change. We can join other successful communities across Europe and all across the globe who are turning to more democratic, decentralised, community-owned, renewable energy solutions, controlled by us and for us (11).
After the success of the last 2 years, the Big Energy Saving Network (BESN) BHESCo is part of a consortium of community energy groups that has applied for support for two energy champions starting again this autumn/winter (12). We will be encouraging vulnerable customers to make themselves known to us because we can help them save money by reviewing their energy bills, offering impartial switching advice to the cheapest tariffs, general advice on energy efficiency in the home and how to keep warm this winter. We will also be taking action to help people be more energy efficient through small measures that we will implement in home visits.
We really can reclaim the power. It’s up to us to do it together. That’s what Community Energy is all about.
1. Budget 2015: Key climate and energy announcements: http://www.carbonbrief.org/blog/2015/07/summer-budget-2015-key-climate-and-energy-announcements/
2. Chancellor to push up renewable energy taxes in Budget with ‘climate shaped hole’: http://www.businessgreen.com/bg/news/2416918/chancellor-to-push-up-renewable-energy-taxes-in-budget-with-climate-shaped-hole
3. Former BP geologist: peak oil is here and it will ‘break economies’: http://www.theguardian.com/environment/earth-insight/2013/dec/23/british-petroleum-geologist-peak-oil-break-economy-recession
4. End of climate levy exemption dents Drax: http://nicosiamoneynews.com/2015/07/08/end-of-climate-levy-exemption-dents-drax/
5. End support for Drax: stop subsidies for biomass power and phase out coal! http://www.theecologist.org/campaigning/2840617/end_support_for_drax_stop_subsidies_for_biomass_power_and_phase_out_coal.html
6. County councils sidelined from nuclear waste dump site decisions: http://www.theguardian.com/environment/2013/sep/12/county-councils-nuclear-waste-dump-sites
7. UK’s shale gas revolution falls flat with just 11 new wells planned for 2015: http://www.theguardian.com/environment/2015/jan/19/uk-shale-gas-revolution-falls-flat-just-11-new-wells-planned-2015
8. Fracking plans rejected: Lancashire council throws out Cuadrilla proposal – at it happened: http://www.telegraph.co.uk/news/earth/energy/fracking/11705333/Fracking-decision-Lancashire-live.html
9. No fracking at Balcombe, says energy company Cuadrilla: http://www.independent.co.uk/news/uk/politics/no-fracking-at-balcombe-says-energy-company-cuadrilla-9081875.html
10. PM ‘to consider’ temporary cap on high UK energy bills (July 7th, 2015 5:50 pm): http://www.ft.com/cms/s/0/843585e6-2474-11e5-9c4e-a775d2b173ca.html
11. Tory ‘blue crap’ means UK is falling behind in global switch to clean energy:
12. Big Energy Saving Network 2015/16: https://www.gov.uk/government/publications/big-energy-saving-network-grant-offer-fund