21 October 2011: The Government’s proposals for future Renewable Obligation (RO) banding levels for different renewable electricity levels have been published today for consultation. The bands set the level of subsidy provided through granting Renewable Obligation Certificates (ROCs) – awarded per MWh (megawatt-hour) of electricity generated – and range from 0.5 ROCs to 2 ROCs per MWh depending on the technology. The ROCs programme runs in tandem to the Feed in Tariffs (FIT) mechanism but is applicable to larger renewable technologies, generally above 5MW capacity.
The consultation moves to providing longer term guidance on the levels of support available to renewable generators whilst also reducing the levels of ROCs support awarded to many technologies and also introducing an element of regression as in the FIT regime (ie a percentage reduction to the levels of support year on year).
Progress on developing larger renewable energy projects in London has been incredibly slow, with only a few notable schemes based around the use of sewage gas at water treatment plant, the capture of landfill gas, and single larger-scale wind project.
DECC’s proposals will do little to help and potentially much to hinder the situation for London. Key renewable technologies being supported for London such as advanced gasification and pyrolysis are to have their levels of support reduced (see Table 2 of the consultation paper for the full list of specific proposals). These are already high risk projects and hence this will do little to get these nascent technologies off the ground. Ditto for urban-based anaerobic digestion plant which are also having their levels of support reduced.
Similarly reducing support to energy from waste CHP without clarifying the level of Renewable Heat Incentive (RHI) tariff that might also be available will do little to inspire confidence in operators considering converting their plant to CHP mode and investing in new district heating infrastructure. Cities are already severely limited in their ability to contribute to the UK’s ambitious renewable energy targets: waste does however provide a key opportunity but project costs are typically much higher due to land value amongst many other factors.
More needs to be done to support the growth of renewables in London and other cities to exploit opportunities to deliver low carbon heat and power to their communities. Government should perhaps consider introducing a ‘ROC uplift’ for urban based schemes to help bring these more challenging city renewable schemes forward – that is – an additional 0.5 to 1.0 ROCs for those schemes developed in cities, with a priority given to those that deliver decentralised heat networks as part of their scheme.