ROCs review favours marine energy among ‘political wrangling’ ...

ROCs review favours marine energy among ‘political wrangling’
Marine energy - wave and tidal - was the big winner in the government’s recasting of support for different renewable electricity technologies under the Renewables Obligation (RO), with support being increased from two Renewable Obligation Certificates (ROCs) per MWh of electricity generated, to 5 ROCS, at least for schemes under 30 MW in size.
The RO is the government’s main support mechanism for large-scale renewable energy schemes.
There was also good news for the hydropower, advanced pyrolysis and gasification, and energy-from-waste industries. However, the more general trend of the July ‘Banding Review’ was a slight reduction in support, including that for onshore wind energy, from one to 0.9 ROCs. Deep geothermal was another loser.
The changes to subsidies for renewable electricity could nevertheless incentivise £20bn of new investment in the economy between 2013 and 2017, said the department of Energy and Climate Change (DECC). Bandings were set for renewable technologies under the Renewables Obligation for the period 2013-17 (2014-17 for offshore wind).
The Banding Review sets out that:
Support for onshore wind from 2013-17 will be reduced by 10% to 0.9 ROCs, a level which is guaranteed until at least 2014, but could change after then if there is a significant change in generation costs.
Rates of support for offshore wind will reduce as the cost of the technology comes down during the decade.
Support levels for certain marine energy technologies will more than double, from 2 ROCs to 5 ROCs per MWh, subject to a 30 MW limit per generating station.
There will be a new band to support existing coal plant converting to sustainable biomass fuels.
There will be no immediate reduction in support for large-scale solar, but there will be consultation this year on reduced support levels, given recent dramatic falls in costs.
By 2017, this package could deliver as much as 79 TWh of renewable electricity per annum in the UK, said DECC - nearly three-quarters of the way towards the 108 TWh of electricity needed to meet the UK’s 2020 renewable energy target. The proposals are expected to bring forward 11 TWh more renewable energy in 2016/17 than current bandings.
Edward Davey, Secretary of State for Energy and Climate Change, said: ‘The support we’re setting out today will unlock investment decisions, help ensure that rapid growth in renewable energy continues and shows the key role of renewables for our energy security. Because value for money is vital, we will bring forward more renewable electricity while reducing the impact on consumer bills between 2013 and 2015, saving £6 off household energy bills next year and £5 the year after.’
At the same time, the government confirmed that it sees natural gas continuing to play an important part in the energy mix well into and beyond 2030. Through the 2020s, and beyond if gas proves cheap, the government expects gas to continue to play a key role in ensuring that there is sufficient capacity both to meet everyday demand and to complement an increasing amount of relatively intermittent and inflexible generation. The government does not, said DECC, expect the role of gas to be restricted to providing back-up to renewables, and in the longer term sees an important role for gas with carbon capture and storage.
The government therefore announced the introduction of a £500mn field allowance for large shallow water gas fields, to secure investment in marginal gas fields in the UK Continental Shelf. The government is to set out its gas generation strategy in the autumn.
The results of the long-awaited Banding Review were broadly welcomed by the renewables industry. But Martin Wright, Chairman of the Renewable Energy Association (REA) warned that the industry is concerned about the further reviews facing many technologies, which are likely to inhibit investment: ‘Business confidence is essential to realise the vast potential of this industry, in which the UK still lags behind the rest of the world. Companies will not invest without stable government policy delivered in a timely manner. At such a critical time for the economy, this country cannot afford any further political wrangling that puts at risk future investment and job creation.’
And, going further, he referred to: ‘A serious misalignment between the attitude of Treasury and other government departments charged with delivering a growing, low carbon economy. The Treasury appears to be frustrating the creation of a comprehensive energy policy for short-term economic and political gain. It is time energy policy properly reflected the long-term interests of the nation.’