Ministers have tabled separate amendments drafted to deal with tariffs for small scale low carbon electricity and with renewable heat and biogas.

The REA has been calling for a tariff like mechanism for some time and its acceptance by the government was met with enthusiasm. The amendments it has tabled are very vague, however, showing that there's still a long way to go.

The design of these tariffs is intended to bring new entrants into the market while safeguarding the existing Renewable Obligation for bulk energy producers.

The government has decided to bring forward the tariffs in two amendments; one for electricity and one for heat and biogas. This is because they will be based on licence revisions for energy suppliers; and the regulatory regime is different for electricity companies and fossil heating fuel suppliers. The main provisions of each amendment are described here on our website.

The REA has championed the concept that the tariffs should bring new groups of players into the market. While the RO is designed for merchant energy producers, usually at large scale, the tariffs are intended for energy users who want to install renewables mainly for their own consumption. This goes beyond consumers and householders to schools, communities and businesses, so above the definition of microgeneration (up to 45/50kW). It is obviously important that there is a clear division between the measures, and a size threshold seems to be the tidiest way of defining this. We considered this issue carefully in our RES response, with a lot of guidance from members - especially the energy suppliers, and recommended that the caps are set later after consultation. In this spirit, the amendments leave flexibility for the cap (or separate caps for different technologies) to be set after consultation. As a further safeguard, the primary legislation will set an absolute limit - currently drafted at 3MW - below which any caps would be set.

Unfortunately the amendments provide an enabling power but no obligation or timetable to actually use it. In practice it is rare that such powers are taken and then not used. However without a firm timetable we cannot be sure how long will it all take for the tariff provision to become a reality. We’ve been told government intends to consult on the electricity tariff next summer so it can be introduced in (probably April) 2010. A consultation on heat is scheduled soon anyway, and this might give the opportunity for heat policy to catch up so the two tariffs are launched together.

L to R;  Leonie Greene, Dick Strawbridge, and Alan Simpson MP at the RET Coalition event in the House of Lords on 14 October 2008. Picture Courtesy of Will Rose

The REA has always advocated a broad cross-technology approach, and by working with such a wide consortium of stakeholders we have been able to agree between us what the key parameters should be and to collaboratively campaign for them.

The renewable tariff campaign has been supported by: WWF, RSPB, Federation of Master Builders; TUC; Institution of Mechanical Engineers; Chartered Institute of Housing; UK Green Building Council; Greenpeace; Compass; Energy Saving Trust; Energywatch; The Co-operative; Institution of Civil Engineers; Scientists for Global Responsibility; Solarcentury; Sharp UK; UNISON; PCS Union; RIBA; Schott UK; Worcester Bosch; Micropower Council; Renewable Energy Association; Friends of the Earth; Places for People; New Economics Foundation; The Premises Studio; World Future Council; National Energy Action; NFU, Home Builders Federation; Country Land and Business Association; British Retail Consortium; and the National Union of Teachers.