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· Ofgem
confirms a significant reduction in the “embedded benefit” paid
to small generators
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· Cut
to benefit will damage existing projects as well as the
development of new cutting edge clean tech projects
Energy regulator Ofgem has confirmed that it will cut the
payments made to small-scale electricity generators.
The payment will be cut from £45/kw to between £3/kw and £7/kw.
The original consultation proposed reducing the benefit to around
£2/kw.
Industry advisory panels that recommended the proposals were
comprised of mainly large-scale power developers and large
utility companies. When the proposed changes were announced small
to medium sized developers, utilities, and operators were deeply
concerned, as were developers of new flexibility technologies
that the Government’s National Infrastructure Commission has in
the past expressed support for.
This cut is in addition to the over a dozen negative policy
changes that the renewable energy and clean tech industry has
endured over the past 18 months.
Dr. Nina Skorupska CBE, Chief Executive at the Renewable Energy
Association said:
“This ruthless cut will be damaging to the development of
next-generation flexibility and energy storage technologies.
Additionally, several gigawatts of already installed renewable
generation capacity will be negatively impacted. This comes on
top of 18 months of damaging and sudden policy changes to the
sector which are not only hammering the financial viability of
new low-carbon projects, but now the viability of existing ones
now too.
“This move will clearly benefit larger, incumbent companies
compared to the innovative renewable energy players that have
burst onto the market in the past decade.
“This decision flies in the face of where the market is
headed. Other nations are actively supporting the deployment of
embedded renewable generation and further decentralisation. They
see this as leading to a grid that is cheaper, cleaner, and will
strengthen jobs and consumers.
“Many manufacturing sites across the country have chosen to
strengthen their bottom lines and reduce their carbon footprint
by investing in onsite energy generation. Despite Government
rhetoric about supporting manufacturing through the Industrial
Strategy, these sites too will be impacted by increased costs,
potentially in the millions of pounds for larger
installations.”
—ENDS—
Notes to editors
