Mixed feelings over ROCs banding review

The renewables sector has responded with mixed feelings over the government’s announced changes to the Renewables Obligation (RO) – the Department of Energy and Climate Change’s chief mechanism for supporting large scale projects.

New bandings have now been set for the period 2013-17 (2014-17 for offshore wind) with support for onshore wind being reduced by 10 percent and a further review due in 2014. Rates of support for offshore wind will reduce as generation costs fall over the next few years whilst support for marine energy will more than double. No reduction in support for large scale solar has been announced although further consulations will take place later this year.

DECC has also announced its intention to consult on excluding from the RO all technologies of 5 MW and below that are currently eligible for support under either the RO or FITs.

John Cridland, CBI director-general, said: “The level of support the government has agreed for onshore wind will help to encourage investment into our energy sector, creating jobs and supporting growth. Companies must be able to invest with confidence so that we can have secure, affordable and low-carbon electricity in the decades to come.”

Gordon MacDougall, ceo RES UK & Ireland,
said: “RES welcomes today’s announcement by the government confirming that support for onshore wind will remain as set out in its original consultation.  By maintaining its commitment to an evidence-based approach, based on broad range of industry experts and stakeholders, the Government has sent a clear signal that Britain is open to investment and that vital investment in the low carbon economy will not be undermined by short-term, political interests.”

Event director of The Renewables Event, Jamie Cook, said: “With the Renewables Obligation (RO) banding now set out for 2013-17, the UK’s commitment to specific renewable energy sources is now assured removing some of the uncertainty that held back investment.”

Those more critical of the announcement included the Renewable Energy Association (REA), Solar Trade Association (STA) and the National Farmers Union (NFU).

STA chief executive, Paul Barwell, said: “We understand that the RO is an inflexible mechanism for a technology as dynamic as solar, but proposing to exclude solar altogether sub 5MW from the RO is not the solution.  Unless the FIT budget cap is greatly increased, this will mean unfairly constraining a cost-effective technology. This is not in the interests of public value for money so it is a potentially self-defeating proposal. The announcement today of changes to support levels from April 2013 will delay the implementation of solar projects under the RO.” 

Jonathan Scurlock, NFU’s renewable energy adviser, said: “Today’s announcement undermines the modest increase in ambition achieved for Anaerobic Digestion (AD) under the FIT proposals last week. There just isn’t enough expected here of the multiple environmental benefits of AD and clearly an insufficient budget. Death by reviews is not going to deliver the ‘huge’ increase in energy from AD the coalition agreement promised. There are fundamental problems with the approach to important mid-sized investors like farmers which DECC now needs to address.”

Dr Ryan Law, chair of the REA deep geothermal group, said: “We are shocked by this announcement. We should be at the forefront of this industry, given the strength of British engineering skills. If the UK wants to seize a share of the booming global market for geothermal development we must prove our competence at home. The message today’s announcement sends to the outside world is that the UK is closed for geothermal business.”

David Collins, REA head of biogas,added: “Today we have learned that government will consult on proposals to remove support for AD (and other FIT technologies) under the RO for projects under 5MW. It is rarely practical to build AD above 5MW – only one of the 33 plants supported under the RO today is over 5MW – so this would effectively represent a total withdrawal of support for AD under the RO.”