This section provides a overview and concise information on various forms of renewable energy, including both power, heat and transport fuels. More in-depth, technical information and all applicable policy, is available to REA members, by visiting the relevant sector group pages, or contacting the sector group chair.
Policy and Legislation
On Tuesday, 18th October 2011, the Energy Bill received Royal Assent and became the Energy Act 2011. The Act provides for a step change in the provision of energy efficiency measures to homes and businesses, and makes improvements to the framework to enable and secure low-carbon energy supplies and fair competition in the energy markets.
The Act can be found here on the Department of Energy & Climate Change website.
The main policies covering renewable energy are outline below.
Feed-in Tariff (FIT)
The Feed-in Tariffs (FITs) scheme was introduced on 1st April 2010, following successful lobbying efforts by the REA, Friends of the Earth and others.
The purpose of the FITs, is to encourage deployment of small-scale (less than 5MW) renewable electricity generation. The technologies currently covered by the FITs are: solar photovoltaics (PV), hydro, anaerobic digestion (AD), wind and domestic scale microCHP.
The goal of the FITs is to encourage the increased uptake of investment in small-scale renewable electricity by providing financial incentives for each kWh generated. Following the installation and commissioning of the installation, generators receive a guaranteed payment from the electricity supplier of their choice for the electricity they generate and use, as well as a guaranteed payment for unused surplus electricity they export back to the grid.
Renewable Heat Incentive (RHI)
The RHI is a tariff scheme similar to the FITs, payable to energy users generating their own renewable heat.
The first phase of the scheme is targeted at the non-domestic sectors and at the big heat users in the industrial, business and public sector and came in to force at the end of November 2011. A range of technologies are supported including: air source heat pumps, biomass boilers, solar thermal, and ground and water source heat pumps.
The second phase of the RHI scheme should see it expanded to include more technologies and include support for households. No consultation has as yet been published but this transition is aimed to be timed to align with the Green Deal, which is due to be introduced in the autumn of 2012. As an interim measure to support domestic renewable heat, the Energy Saving Trust (EST) is offering a one off Renewable Heat Premium Payment (RHPP) for various commissioned domestic installations dated between 21st July 2011 and 31st March 2012 including;
Solar Thermal Hot Water - £300 RHPP
Air Source Heat Pump - £850 RHPP
Ground Source or Water Source Heat Pump - £1250 RHPP
Biomass Boiler - £950 RHPP
Please refer to the EST website for eligibility. For more additional information, please see the links below. See the DECC website here for more details on the tariff levels and the scheme. Also see additional links below.
Press release – link to DECC’s 10th March 2011
DECC RHI update – links to DECC website
Ofgem RHI Guidance – links to Ofgem website
What is the RHI – links to EST website
What is the RHPP – links to EST website
Application form for RHPP – links to EST website
Renewables Obligation (RO)
The Renewables Obligation (RO) is the current main mechanism for supporting large-scale generation of renewable electricity. The RO works by placing an obligation on licensed electricity suppliers to source a specified and annually increasing proportion of their electricity sales from renewable sources, or pay a penalty. Electricity suppliers can purchase Renewable Obligation Certificates (ROCs) from accredited renewable electricity generators. Renewable electricity generators receive ROCs for each MWh they produce.
The RO was introduced in 2002, and for 1 MWh a generator received 1 ROC, the scheme did not differentiate between technologies. In April 2009 a significant change to the RO was made with the introduction of banding. With banding, the number of ROCs received per MWh varied with technology, based on their costs and potential for deployment.
For more information and details on the RO please visit the DECC website by clicking here.
The Energy Act 2011 creates a new financing framework to enable the provision of fixed improvements to the energy efficiency of households and non-domestic properties, funded by a charge on energy bills that avoids the need for consumers to pay upfront costs. DECC Green Deal information found here.
Electricity Market Reform (EMR)
Planning Our Electric Future: A White Paper for Secure, Affordable and Low-carbon Electricity. The publication of this White Paper on 12th July 2011, marks the first stage of the reform process. The Government intends to legislate for the key elements of this package in the second session of this Parliament, which starts in May 2012. The White Paper can be accessed here.