Consultation on Renewable Electricity Financial Incentives 2009

Attached files
Renewable Electricity Financial Incentives 2009 - ConsultationonRenewableElectricityFinancialIncentives20091.pdf (1 MB)

Tackling climate change is the key challenge facing our generation. Maintaining security of energy supply is a closely related imperative. The Department of Energy and Climate Change was set up to integrate and lead the Government’s efforts on both fronts.
We need to move to a low, virtually zero carbon electricity system. This will be achieved by a combination of clean coal, nuclear and renewables. Our UK Low Carbon Transition Plan
sets out our overall strategy and our Renewable Energy Strategy is our action plan for renewables.
We need to provide the right financial framework to harness the ingenuity and the innovation of individuals, communities and companies to drive renewables and make them tomorrow’s mainstream energy choices. Long-term challenges need long-term solutions: we are putting in place policies for the next decade and beyond.
The Renewables Obligation has succeeded in tripling eligible renewable electricity generation, from 1.8% in 2002 to 5.3% in 2008. We now produce more offshore wind power than any other country in the world; approximately 1.3 TWh per annum, enough to power the equivalent of 260,000 homes. This document consults on proposals for making the Renewables Obligation more ambitious, encouraging new investment and making the Renewables Obligation capable of financing nearly a third of our electricity from renewable sources.
Under the lead scenario presented in the Renewable Energy Strategy, around a fifth of our electricity could come from wind power. We recognise that we are facing a difficult time in the economic cycle and investment in the transition to renewables will play an important part in our economic recovery and renewal. We are consulting here, as promised in the 2009 Budget, on a time-limited increase in support to offshore wind, to ensure deployment does not slow and we continue to remain a world leader in this vital technology.
The Renewables Obligation is more focused on larger projects. We also want to encourage smaller projects, generating electricity closer to where it’s used: solar panels on people’s houses, community wind projects and farm based anaerobic digestion. This needs a simpler system, with more predictable returns. We are therefore also consulting on Feed-in Tariffs to guarantee an income for small scale renewable electricity generators.
Feed-in Tariffs will open up renewable energy generation beyond the traditional energy companies. It will enable communities to come together and invest in generating renewable electricity. It will make it easier for householders and business to finance their own electricity generation. It will help us all play our part in renewing our electricity supply.
Climate change is a threat. Tackling it brings the opportunity of creating a new green economy. These proposals provide the financial framework for ensuring that opportunity is realised.