Utility Week

UTILITY WEEK | 3RD - 9TH AUGUST 2018 | 15 Policy & Regulation schemes will "struggle" to compete. Pointing to figures from Bloomsbury New Energy showing that domestic installations are already running at 2 per cent of 2011 lev- els following the 2016 cuts, Whitehead says. "The net effect is that support for domestic [solar] will fall off the cliff. "This has killed or will probably kill off domestic solar." Export tariffs cut However, while few were confident that gen- eration subsidies would survive, even fewer expected the government to announce that export tariffs would also be culled. This tariff provides domestic renewable kit owners with a fixed rate for what they export to the grid, based on the assumption that they will consume roughly half of what they produce and sell the rest. One renewables source says: "We are now in the bizarre situation where you will be giv- ing away for free 50 per cent of your electric- ity. If you were going to be spiteful you would be better off earthing the solar panels." James Court, head of policy and external affairs at the Renewable Energy Association, says: "The industry had reconciled itself to no direct replacement for generation tariffs but the abolition of export is an unreason- able position to put consumers in." What makes the FITs move particularly perplexing is that it runs counter to the gov- ernment's stated commitment to promoting a smart and flexible grid. The export tariff provides those who own their own renewable kit with a mechanism to export their surplus supply. Leonie Greene, head of external affairs at the Solar Trade Association, says the govern- ment is penalising the kind of low-carbon energy pioneers it should be encouraging "It's so important that they are given a good experience. At the moment they are fac- ing an absolute mess. If you make that jour- ney a bad experience, it's going to backfire. "We need a coherent journey for the small investor nationwide, which is why it's absolutely essential to keep the export mechanism. Otherwise you are effectively subsidising the suppliers, which is wacky." 'Unclear' for solar The plummeting cost of solar panels over recent years holds out of the prospect that this technology could soon supply subsidy- free renewable power. But even the consultation paper acknowledges that is "unclear" whether solar and onshore wind projects can be self- sustaining without some form of government intervention (see page 16). prices will make it possible to reallocate funding to other technologies. "The offshore strike price is only likely to be marginally above general prices, so we see the possibility of that £557 million going quite a lot further." Some of that looming slack could be redeployed to support the ongoing rollout of solar PV, Whitehead says. "You would hardly need any because solar PV is on a glide path to parity: really it's about the certainty and the ability to put together a planned pro- gramme," he says. "Unless auctions go very much the other way you can probably get a pretty good wind programme and have room for other technol- ogies as well." So why has the government not taken this approach? Whitehead blames a "pretty dog- matic and inflexible approach" to renewable support within the Treasury, where memo- ries linger fresh of how FITs costs ballooned under the coalition government. "I presume BEIS must understand how export tariffs work. Either they didn't put the case very well to Treasury, or it has turned its face against anything that looks like a support." There is "no consistent set of criteria" that appears to be guiding energy policy, argues Parr. And relying on even the green- est mega-projects, such as the massive wind- farms being mooted in the North Sea, will only work up to a point in the new world of decentralised electricity generation and dis- tribution, he says. "When you have lots of EVs on the system new ways of balancing become more important." What next? Parr backs a suggestion, voiced recently by Lord Hutton, that the time is ripe for an energy white paper to bring some coherence to policy in the sector. "If there were ever a time to look around and see what's going on it's now." She's fixed the date for Green Great Brit- ain Week. It increasingly looks like Claire Perry will have her work cut out, then, explaining how the UK's low-carbon future is shaping up. The future of the UK support for renewa- bles is one of the themes featuring strongly at this year's Utility Week Congress on 9 and 10 October. For more details go to event.utilityweek.co.uk/congress/ It acknowledges there may not be many sites big enough and benefiting from easy access to grid connections or storage, like the first subsidy-free solar farm at Clay Hill, which can operate without support. A spokesman for Scottish Renewables says: "It seems like we are so close, espe- cially with solar, that to pull the rug now is wrong-headed." Retaining some form of export tariff is essential to getting solar over the line to a subsidy-free future, says Whitehead: "If you kept or marginally increased the export tar- iff, that could be a viable way of underpin- ning solar on its glide path, but they have shut down that too. It appears to be a piece of dogma not a practical proposal." And withdrawing the FITs, with the knock-on impact this is likely to have on small-scale renewable deployment, will mean other measures must pick up the slack if the government is to have a hope of meet- ing its statutory carbon reduction targets, he adds. Limited options The other danger, graphically underlined during the hot weather over the past few weeks, is the risk of relying on a limited suite of technologies. The sunny weather has driven up solar generation to record levels. At the same time, the UK has been in the middle of what Energy UK chairman Lord Hutton termed a "wind drought" recently. This phenomenon is unlikely to be a one- off, says Parr: "There will be periods of low wind, like now, and for the UK it's certainly the case that coincides with high levels of solar, so there is a certain amount of trade- off to be done." A "diversity of sources" of energy is use- ful, therefore, he adds. But Whitehead says the government's current approach is "betting the farm on offshore at the expense of every other technology". Reallocating funding Pointing to calculations in the recently pub- lished National Infrastructure Assessment, he argues that descending offshore wind Offshore wind still looks pretty good, but for anything other than that technology it looks pretty bad.

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