Friday, 18 March 2011

Feed-in tariff decision is too far, too fast

The Government has today announced its review of the feed-in tariff for renewable energy - and it's bad news for Cornwall. The limit is to be cut 100-fold from 5Mw to 50Kw and this will rule out any large scale schemes in Cornwall - of which there are large numbers in the pipeline. Any scheme not already plugged in by August 1st would lose out - including all but perhaps one or two in Cornwall.

The review seems to have been sparked by what is perceived to be too many developers trying to take advantage of the generous feed-in tariff levels on offer - currently around 41p per unit. This is the money that a renewable energy producer gets for electricity that it supplies to the grid.

In Cornwall, partly because of our geography, we have seen a large number of schemes proposed. Cornwall Council is planning two £14m schemes of its own as well as some roof-top projects on schools and council houses. All of these may be under threat from the review.

There's no doubt that the current feed-in tariff is very generous. But that is not automatically a good reason to ditch it. Current government policy on cutting greenhouse gases in energy is based on four strands:

- carbon capture and storage
- renewable energy
- nuclear energy
- energy waste reduction

One of these strands - nuclear - is clearly going to be out of play for any commercial venture in the medium term but was the mainstay of the Government plans (much to the annoyance of the Lib Dems). Following the Japanese disaster, no business is going to be keen to build new power stations, even in a country far away from any earthquake zone.

And so the other three strands will have to pick up the slack. I have no doubt that the review documents were written well before the current crisis in Japan, but it seems illogical to be killing off a second strand at this time.

I very much hope that Chris Huhne and the Government will reconsider their current review proposals and will judge that, whilst a slight cut to the feed-in tariff level is needed, a cut to scheme size is the wrong message to send at this time.

I don't always agree with Cabinet Member Carolyn Rule, but on this issue I do. She said:

"So far not one commercial size solar farm has been built in the UK and, following these changes, I doubt if many will."

If the Government is committed to increasing renewable energy and meetings its climate change obligations, Chris Huhne should think again.

No comments: