Renewable chiefs warn that small-scale generators face 95% Govt. cut in embedded benefits

The Government has proposed a reduction of up to 95% reduction in payments – from around £45/kW to around £2/kW –  that are made from energy suppliers to smaller, decentralised, and often renewable electricity generators.

But the Renewable Energy Association – Britain’s biggest such trade body – said that the move represents a step backwards for cutting-edge energy storage and demand-side response technologies, which stand to save the energy system billions of pounds

Despite a parallel Government call for evidence on creating a more smart, flexible energy system, the proposed actions would penalise smaller-scale projects and in turn support larger, conventional power stations.

As the proposed changes would not be “grandfathered” in they would adversely impact existing projects in addition to future ones, a move which signals to investors that the UK is comfortable with penalising innovators and those that would seek to develop badly needed energy infrastructure.

An REA spokesman explained: “While we agree that regulatory change is needed to account for the significant uptake in decentralised generation, renewable power deployment, and the growth of associated clean technologies (such as storage and flexibility), such a narrow focus on one issue ignores the wider issues at play and could lead to greater complexity and further market distortion.

“This decision flies in the face in the face of where the industry is trying to move, making decentralised and renewable technologies more expensive whilst rewarding existing incumbent fossil fuels.

“Grid charging is complex, trying to unpick one area seriously distorts the whole market. We, along with the vast majority of the industry, have been calling for a significant code review to look at the entire area to ensure that charges are fair and appropriate. This highlights the problems of a selected few making decisions on behalf of the whole sector.”