On the day that new figures illustrate that there is now more
renewable electricity capacity on the system than there is fossil
fuel (Electric Insights), Ofgem has agreed to offer opt outs from
the Energy Bill price cap for those offering renewable energy
tariffs, a positive move for the renewables industry as it will
help fund future projects. However ‘the devil is in the detail’,
with significant uncertainties created about which projects would
qualify for this, and no acknowledgment of the added benefit to
the system of Green Gas certificates and energy storage.
This decision comes after the REA and members fed into Ofgem’s
consultation over the summer and met with the regulator to
discuss support for this critical emerging industry. Suppliers
now have only a week to submit a full application for derogation
of any green tariffs.
Frank Gordon, Head of Policy at the REA said:
“The renewables industry welcomes most of the amendments that
Ofgem have made to their initial price cap proposals, in
particular a ‘derogation’ mechanism that will allow for renewable
power suppliers to enter into direct purchase agreements with new
sites but notes the potential ambiguity in terms of which
projects will and won’t qualify.
“This mechanism could provide a much needed lever to support
new solar, wind, and other renewable power deployment, helping us
meet our decarbonisation targets on the day renewable generation
capacity has overtaken fossil fuel capacity. However we have real
concerns over which renewable power projects would actually
qualify, and the approach to Green Gas certificates, which will
not be automatically considered additional support worthy of
derogation, if a site is also receiving RHI support.
“In addition energy storage activities by a supplier are
considered ‘not to directly support renewables’, even
though such investment typically accompanies new renewable power
projects Our view is that all new forms of power system
flexibility, be it co-located with generating sites or not,
supports the growth of the renewable power sector.”
—ENDS—
Notes to editors
