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UK Feed-in Tariff Generated Nearly 380,000 Renewable Installations In Three Years

Feed-in tariffs are not only a hot topic of conversation for renewable energy discussion, but a point of great contention as well. However, according to a report published by the UK Office of Gas and Electricity Markets (Ogfem) you can’t disagree with their results. According to the 12th issue of the Feed-in Tariff Update Quarterly, published by Ogfem, a total of 379,530 renewable energy installations were registered under the FIT scheme as of 31 March, 2013.

The report offers a comprehensive statistical summary of the first three years of the feed-in tariff (FIT) scheme, as well as providing policy updates of key changes to the scheme in the scheme’s third year.

For the uninitiated, or those who simply haven’t the time to dedicate to the economic intricacies of international tariff schemes, a feed-in tariff is simply the agreement made by a government body to pay a set rate per kilowatt-hour for electricity generated pumped back into the larger energy grid over a set period of time; in this case, we are referring specifically to the energy generated by renewable energy installations across the United Kingdom.

FIT Update - June 2013_issue12_WEBThe numbers are healthy, especially if you are in the photovoltaic industry who have benefited more than any other renewable energy source from the FIT scheme. 89% of total installed renewable capacity came from solar photovoltaics, leaving hydro, wind, anaerobic digestion, and micro CHP (combined heat and power) to make up the remaining 11% of installations between April 1, 2010 and 31 March, 2013.

However, this last quarter also represented a downturn in interest for FIT-based renewable projects, recording the lowest number of registered projects across the three year period. Even in the past 12 months, as can be seen in the table below, registered projects took a bumpy ride, up one moment and down the next, but never in the same quarter.

FIT Update - June 2013_issue12_WEB

Wind installations during October to December 2012 saw a quick increase, before settling back down closer to the previous average, while the quarter before saw photovoltaics take a massive jump before dropping precipitously the following two quarters.

Following is a breakdown of installed capacity by technology across the United Kingdom. Perhaps unsurprisingly, given the sunnier conditions and resulting influx of photovoltaic installations, the south of England has the highest total installed capacity, combining 375.37 MW for the South West of the country and 241 MW for the South East.

FIT Update - June 2013_issue12_WEB

Turn north, however, and photovoltaic’s domination in Scotland drops, ceding 35% to wind and another 15% to hydro, their highest installation base across the whole of the UK. In fact, the average size of a wind turbine in Scotland is higher than anywhere across the rest of the country; 33.5 kW compared to 26 kW.

The drop in FIT projects is not to be interpreted as a negative on the industry, but rather an economic reality. As the number of projects increased the various industries as a whole grew more stable as a result, and subsequently require less government protection and assistance.

There are some industry experts who believe cutting off feed-in tariff-style assistance to the still-burgeoning renewable energies industry could lead to further constriction of the market. This is especially a concern in light of the European Union’s recently deployed tariffs on Chinese-imported solar panels and photovoltaic materials.

Late last month reports out of China revealed that, following the European Union’s decision to tariff Chinese-made photovoltaic products, they would be redirecting some of the energy away from Europe and into Africa. Another report released earlier in June suggested that the anti-dumping tariffs would cost Europe approximately 1.3 GW in solar photovoltaic installations.

However, Barny Evans, principal consultant at environmental advisory firm WSP, believes that the latest UK FIT figures are representative only of a stabilisation in the renewable energy market as the automatic degression system impacts the solar PV market.

“What we’re seeing is, indicatively, a stabilising of the market, which, arguably, vindicates the government’s policies,” he told BusinessGreen. “There are even signs that technologies other than solar panels are beginning to make some traction, particularly where there are greater returns to be made.”

 
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