Renewables industry warns ‘Clean Energy Cash Back’ scheme must be more ambitious

Published:  15 October, 2009

LONDON: The government’s consultation on its 'Clean Energy Cash Back' scheme closed today amid widespread anxiety that the current proposals will not attract sufficient investment to achieve even the government's un-ambitious target of 2% of electricity from local renewables by 2020.

Advocates of the scheme say it should deliver over 5% of UK electricity by 2020 but that it will require a higher Tariff rate than currently proposed.  The technical potential for sub 5MW technologies, estimated in a study alongside the consultation, is huge at around a third of UK electricity demand.

The Clean Energy Cash Back scheme is similar to 'Feed-In' Tariffs schemes that are being used successfully in over 40 countries around the world to increase renewable energy deployment and bring down the costs of the technologies.  The scheme will begin in the UK in April next year and will apply to technologies from the smallest microgenerators up to 5MW community schemes.   The UK Tariffs will offer a premium payment for every unit of renewable energy generated over the next 20 years – with a bonus for surplus power exported to the grid.

Leonie Greene of the Renewable Energy Association (REA) said: "from the industry’s perspective the scheme is well designed, but the proposed Tariff levels are set too low and applied inconsistently across technologies.  It worries the industry that almost every important potential investor we’ve spoken to, from the commercial sector, to social housing providers and community scheme develops, all say the proposed rates are too low.”

Energy Saving Trust research carried out over the summer has also confirmed that the proposed payments levels are unlikely to attract sufficient interest from the domestic sector to achieve the low 2% target set, particularly once the cost of loan finance is factored in.

Friends of the Earth Climate Campaigner, Dave Timms said:  “The Government and campaigns such as 10:10 encourage us all to do our bit to help tackle climate change. Many are keen, and generating their own green energy is a great way to do this.

“The Clean Energy Cashback scheme has huge potential, but it will fail to make an impact unless the government dramatically improves the amount that will be paid to businesses, households and communities that generate renewable electricity.”

The role of the commercial sector seems to have been particularly neglected as supporting documents make clear the Tariff levels proposed will not work for this sector.  Yet the commercial sector has a vital role to play in local renewables deployment, from building new green homes, offices and supermarkets, to turning sector waste into green energy.

REA and Friends of the Earth, who led the campaign to secure the scheme, are pressing for a return on investment of 10% for the first three years of the scheme to ensure a successful start.

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