UK export payments won’t end – but they will get much smaller

Share

With U.K. Energy Minister Claire Perry having reportedly been given a rough ride by anti fracking protesters at last week’s COP24 climate change meeting, life at public outings is unlikely to get any easier after the decision to end flat rate export payments was confirmed.

Predictably, a consultation launched by the government in July has reached a conclusion that flies in the face of most respondents’ concerns, by announcing the end of flat rate payments for excess electricity generated by small scale renewable energy generators and fed back into the grid.

After the end of March – with the exception of a small number of less-than-generous exemptions – the payments received by small scale generators for excess power will instead be determined by the levelization process. That is a system which allows traditional power companies – dominated by the much-reviled ‘Big Six’ in the U.K. – to share the cost of making such payments to generators between them, and even to charge to cover their costs for administering the service.

The continuation of export payments, at a much reduced level, means Ms. Perry can say she was true to her word when she told a House of Commons committee last month: “I do completely agree that solar power should not be provided to the grid for free and that’s why I’ll shortly be announcing the next steps for small scale renewables.”

Call for export floor price

The announcement prompted a predictable response from the U.K.’s Solar Trade Association (STA). Chief Executive Chris Hewett said, in a statement: “Nobody is saving any money here because the export tariff is not a subsidy. Last month, Energy Minister Claire Perry said that she would not allow a situation where solar generators would have to give away their power for free.

“We urgently need her to set out the detail behind plans for an export floor price as soon as possible to prevent the uncertainty that today’s announcement will create from damaging market confidence any further. The STA has proposed a number of viable options, so there is no justifiable reason for delay.”

In a double whammy for small-scale generators, the cost of incorporating net-metered export payments into the levelization process will be included in the scheme, further reducing payments to renewable energy generators, despite the government admitting: “The majority of respondents did not express a clear opinion on this proposal, commenting on the complexity and technical nature of the subject matter.”

No-deal Brexit looms

The consultation exercise, which had been criticized in some quarters as a time-wasting process when the government had already made up its mind on FITs and export payments, appears to have been a classic example of box ticking.

The announcement of the decision highlights that of the 345 responses received, 315 disagreed with the proposals, with only 16 declarations of support and 14 respondents refusing to comment either way.

Reducing household energy bills for consumers as part of restraining the cost of living is fast becoming a necessity as Prime Minister Theresa May’s apparently calamitous handling of Brexit negotiations has dramatically increased the likelihood of Britain crashing out of the EU without an agreement.

It is unlikely the long-awaited results of the consultation were held back until a time when the nation was distracted by Brexit twists and turns – that allegation could probably be applied to any point since the exercise was launched in the summer. However, today’s announcement may shed light on the decision by the government to this morning reissue a press release about its tripling of funding to one of its climate change endeavors, despite the fact it had already announced the news a week ago.