Wind industry wants feed-in tariff changes

The British Wind Energy Association (BWEA) is calling for changes to the feed-in tariff system proposed by the UK government as part of a consultation exercise on financial incentives to boost renewable energy generation in the country.

Feed-in tariffs (FITs) are considered an important mechanism to stimulate the growth of renewable energy production and to help the UK to meet its 2020 goals in this area. They work by requiring utilities companies to buy electricity from microgeneration facilities producing up to 5MW at fixed rates, which are set at a higher level than standard wholesale prices.

Provision was made for their introduction in the 2008 Energy Act and the consultation on how the FITs scheme will work, including proposed tariff levels, closes today. The aim is to implement it by April 2010.

But the organisation is unhappy with current proposals. It claims that they only encourage the development of sites subject to the highest of mean wind speeds, and not small-scale generators.

Alex Murley, head of small systems at the BWEA, said: “The FIT needs to grasp a rare opportunity to stimulate grass root interest in self-generation of green energy, while simultaneously delivering economic and industrial value for money.”

If installations with mean wind speeds of 5.0 and above were provided with financial incentives instead, however, it would stimulate the creation of a high-volume consumer and business market for the use of small wind turbines generating less than 15kW.

Wind Band 3 tariff levels should also be changed from a proposed 15-50kW to 15-100kW to more accurately reflect the current nature of the small wind market, the BWEA said. It believes that a reasonable tariff for the expanded band would be the currently suggested 20.5p/kWh.

Moreover, the organisation contests that an initial two to three year freeze on small-scale wind tariffs should be introduced before degression – or an annual reduction of those tariffs – is applied.

The aim here would be to give UK manufacturers sufficient time to up capacity in order to cope with the increased demand generated by the creation of a high-volume market.

And such demand is likely to be forthcoming, the BWEA believes. The UK already accounts for between 20-25 per cent of global demand for small wind turbines and is the second largest market in the world behind the US.

UK manufacturers, of which there are currently 18, control an 82 per cent share of the domestic market in revenue terms and employ 2,000 staff in the country.

The UK also became the world’s largest exporter of small wind systems in 2008, when overseas revenue doubled. Export to about 100 different countries accounted for about half of UK manufacturers’ product sales last year.