Released July 30, 2012 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- The U.K. government has published its new subsidy levels for renewable energy, projects, claiming they will help generate up to 32 billion ($39 billion) in investment between 2013 and 2017.
The reductions in the levels of Renewables Obligation Certificates (ROCs) -- the main mechanisms for support large scale renewable energy projects - have proved far less harsh than was previously expected for both onshore and offshore wind projects. In addition, ROC support for wave and tidal projects has been more than doubled.
There are no planned cuts for offshore wind support in the short-term, in an effort to get the fledgling sector off the ground. The cut in financial support for offshore will not come into effect until April 2015, when it will be reduced from 2 ROCs per megawatt hour (MWh) to 1.9 ROCs per MWh. A further cut to 1.8 ROCs will take place in April 2016. Onshore wind will see a cut of 10%, thanks to its established status and falling costs.
The new banding levels set out that:
Support for onshore wind from 2013-17 will be reduced by 10% to 0.9 ROC per megawatt hour (MWh). This level is guaranteed until at least 2014 but could change after then if there is a significant change in generation costs. A call for evidence on onshore wind industry costs will be launched this Autumn and report in early 2013.
Rates of support for offshore wind will reduce as the cost of the technology comes down during the decade.
Support levels for certain marine energy technologies will more than double from 2 ROCs to 5 ROCs per MWh, subject to a 30 MW limit per generating station.
There will be a new band to support existing coal plant converting to sustainable biomass fuels. This will increase the amount of renewable energy produced at less cost to consumers.
There will be no immediate reduction in support for large-scale solar, but there will be a further consultation this year on reduced support levels given recent dramatic falls in costs.
"Renewable energy will create a multi-billion pound boom for the British economy, driving growth and supporting jobs across the country, claimed Edward Davey, Secretary of State for Energy and Climate Change. "The support we're setting out today will unlock investment decisions, help ensure that rapid growth in renewable energy continues and shows the key role of renewables for our energy security."
The new ROC scheme has been widely welcomed by the renewable energy industry.
Maria McCaffery, CEO of RenewableUK, the trade and professional body for the wind and marine energy industries, said: "We welcome the Government's decision to set its financial support for onshore wind energy at a level that will enable the industry to continue to grow. Although it has been a long time in coming, the final decision was based on hard economic evidence, and was not derailed by short term political considerations. We recognise that these are difficult economic times and we have been trying to drive costs down."
She added: "The carefully-phased reduction in financial support for offshore wind over a long timeframe shows that the Government is committed to the development of the UK's world-leading offshore sector as a key part of our energy mix."
However, not everyone is satisfied with the new subsidy levels, with energy major Scottish and Southern Energy plc (PINK:SSEZY) (SSE) (Perth) stating that "it will have no impact on existing assets in operation or under construction but...it means SSE no longer expects to develop any new conventional hydroelectric schemes and that the scope to increase generation of electricity from biomass at coal-fired power stations is significantly reduced. In addition, the decision to limit the guarantee of 0.9 Renewable Obligation Certificates to electricity from onshore wind farms commissioned between April 2013 and March 2014 introduces a new uncertainty that could potentially restrict the future development of this technology."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The reductions in the levels of Renewables Obligation Certificates (ROCs) -- the main mechanisms for support large scale renewable energy projects - have proved far less harsh than was previously expected for both onshore and offshore wind projects. In addition, ROC support for wave and tidal projects has been more than doubled.
There are no planned cuts for offshore wind support in the short-term, in an effort to get the fledgling sector off the ground. The cut in financial support for offshore will not come into effect until April 2015, when it will be reduced from 2 ROCs per megawatt hour (MWh) to 1.9 ROCs per MWh. A further cut to 1.8 ROCs will take place in April 2016. Onshore wind will see a cut of 10%, thanks to its established status and falling costs.
The new banding levels set out that:
Support for onshore wind from 2013-17 will be reduced by 10% to 0.9 ROC per megawatt hour (MWh). This level is guaranteed until at least 2014 but could change after then if there is a significant change in generation costs. A call for evidence on onshore wind industry costs will be launched this Autumn and report in early 2013.
Rates of support for offshore wind will reduce as the cost of the technology comes down during the decade.
Support levels for certain marine energy technologies will more than double from 2 ROCs to 5 ROCs per MWh, subject to a 30 MW limit per generating station.
There will be a new band to support existing coal plant converting to sustainable biomass fuels. This will increase the amount of renewable energy produced at less cost to consumers.
There will be no immediate reduction in support for large-scale solar, but there will be a further consultation this year on reduced support levels given recent dramatic falls in costs.
"Renewable energy will create a multi-billion pound boom for the British economy, driving growth and supporting jobs across the country, claimed Edward Davey, Secretary of State for Energy and Climate Change. "The support we're setting out today will unlock investment decisions, help ensure that rapid growth in renewable energy continues and shows the key role of renewables for our energy security."
The new ROC scheme has been widely welcomed by the renewable energy industry.
Maria McCaffery, CEO of RenewableUK, the trade and professional body for the wind and marine energy industries, said: "We welcome the Government's decision to set its financial support for onshore wind energy at a level that will enable the industry to continue to grow. Although it has been a long time in coming, the final decision was based on hard economic evidence, and was not derailed by short term political considerations. We recognise that these are difficult economic times and we have been trying to drive costs down."
She added: "The carefully-phased reduction in financial support for offshore wind over a long timeframe shows that the Government is committed to the development of the UK's world-leading offshore sector as a key part of our energy mix."
However, not everyone is satisfied with the new subsidy levels, with energy major Scottish and Southern Energy plc (PINK:SSEZY) (SSE) (Perth) stating that "it will have no impact on existing assets in operation or under construction but...it means SSE no longer expects to develop any new conventional hydroelectric schemes and that the scope to increase generation of electricity from biomass at coal-fired power stations is significantly reduced. In addition, the decision to limit the guarantee of 0.9 Renewable Obligation Certificates to electricity from onshore wind farms commissioned between April 2013 and March 2014 introduces a new uncertainty that could potentially restrict the future development of this technology."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
