UK Law's Passage Arouses Dispute Over Green Energy
Date: 20-Nov-08
Country: UK
Author: Daniel Fineren
Members of parliament passed a Climate Change Bill on Tuesday committing Britain to reducing its greenhouse gas emissions by 80 percent by 2050, the first legally-binding carbon cutting target in the world.
Some last-minute changes to renewables support schemes in a parallel Energy Bill, which is essential to meeting the emissions target, need final approval by the upper house next week.
"The Climate Change Bill has gone through," a spokeswoman for the Department of Energy and Climate Change (DECC) said on Wednesday. "The Energy Bill will be back in the House of Lords next Tuesday."
If approved, the plan to give households a guaranteed price for electricity they feed into the grid from tiny power sources like solar panels and wind turbines will be expanded to include bigger renewable developments -- such as in hospitals and schools.
Environmentalists argue that expanding this feed-in tariff scheme to projects with capacity of up to five megawatts would make community renewable power more attractive to investors, and help deliver the increase in clean energy needed to meet the carbon cut target agreed on Tuesday.
RENEWABLES OBLIGATION
But the Association of Electricity Producers, representing companies that generate about 90 percent of Britain's electricity, warn it could undermine the existing renewable energy support scheme, called the Renewables Obligation (RO).
The RO forces utilities to get a certain portion of their electricity from renewable sources or else pay a penalty, money which is then used to pay renewable power producers.
"We are strongly in favour of the renewables obligation and the RO, or a mechanism like it, only works if the government maintains it consistently," AEP chief executive David Porter told Reuters.
"Every time you meddle with it you damage the confidence that people have in the RO and it has to be rebuilt."
Porter said a simple reward system for domestic renewable energy schemes was welcome. But raising the bar to include bigger projects could cause developers to freeze existing projects for up to five mid-sized turbines, planned under the RO, to see if they would make more money from feed-in tariffs.
"It interrupts development," he said, adding that developers might cut the number of turbines in some projects to get them included in a potentially more lucrative feed-in scheme.
A spokeswoman for the DECC, which proposed the increase, rejected concern that many projects could be affected by the changes as only 10 percent of the schemes claiming support under the RO are below 5 MW in capacity.
"We are confident that we set the right level and we are confident that it gives us enough flexibility to roll out feed-in tariffs for small scale generators beyond just domestic, so things like communities, schools and hospitals would be able to benefit," the DECC spokeswoman said.
Feed-in tariffs have been very effective in boosting the adoption of solar power by households, farmers and communities in Germany. Such tariffs, also very popular in Spain, guarantee a certain power price premium typically for many years.
Other parts of the Energy Bill which is expected to be passed next week include support for renewable heat production and offshore wind farms and rules on how developers will pay for nuclear waste disposal and plant closures.
Under European Union targets Britain needs to get 15 percent of its energy from renewable sources by 2020 compared to just 1.3 percent in 2005.
(Editing by Anthony Barker)