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The Low Carbon Economy Ltd

11 Mar 2011 12:03:03

Barking up the wrong tree: Examining the motives behind the solar PV FIT review



Barking up the wrong tree: Examining the motives behind the solar PV FIT review
By Toddington Harper, Managing Director www.LowCarbonEconomy.com

Since the government announced the fast track review on February 7th to counter their perceived 'solar farm threat', I continue to experience a wide range of emotions – disbelief, anger, frustration, and annoyance mostly.

I've also spent a great deal of time trying to understand why - against all the facts - would people who on one breath say they 'want to be the greenest government ever', on the next breath say they consider solar PV energy being deployed in the UK at any scale a threat?

Let's dissect this oxymoron and try to understand their motives.

Is it about cost?

Even a relatively small commercial-scale solar PV installation (i.e. starting from the size of a sports hall / hospital roof which will be several hundred kW's at the very least) costs one-third less per unit of renewable energy produced than for a household-size installation.

Larger installations also create economies of scale that consistently drive down costs for PV faster than any other renewable energy technology. These are facts that are universally understood, so the motive can't be cost.

Was the FIT only ever designed for individuals and small businesses?

It's not possible to rewrite history. There's a plethora of documents that explain what the FIT was always intended to do. In fact, you only have to look as far as DECC's (original) FIT page that (still) clearly states: "Through the use of FITs, DECC hope to encourage deployment of additional low carbon electricity generation, particularly by organisations, businesses, communities and individuals who are not traditionally engaged in the electricity market." (N.B. Generally people emphasise the most important points in sentences by putting them first, suggesting that when the FIT page was written the priority was in fact organisations, businesses, and communities rather than simply individuals?) To remind those who have forgotten, as most of us remember, the FIT scheme was introduced to drive the adoption of renewable energies in the UK, and help us meet our 2020 targets. This was in addition to helping deliver all the benefits offered by a truly decentralised low carbon economy, such as efficiency savings and increased energy security. We needed the FIT scheme because the Renewables Obligation (RO) scheme introduced by the previous government is unpredictable, very difficult to work with unless you are a very large company, and has failed to deliver significant renewable energy on a decentralised scale in the UK. Supported strongly by the Conservative government (which initially suggested increasing the upper limit to 10MW), FIT's were voted through by all parties in the Energy Act 2008.

"The FITs is designed to be available through Licensed Electricity Suppliers and is intended to encourage the uptake of small scale renewable and low carbon technologies of a capacity size up to 5MW," it states. Now we certainly can't ignore the legislation – 5MWp is what was voted into law by all parties as the upper limit of the FIT. To put it in perspective, 5MW can provide the baseload energy for over 3,000 homes. This is another fact that cannot be escaped!

In light of the overwhelming documentary evidence, we cannot accept that the FIT was ever been intended for only small businesses and individuals, as the government is now claiming. If this really was the reason, the government would have also called a review into 5MWp wind farms under the FIT – but they haven't. Why?

Were large-scale PV projects pushing the scheme over budget?

The reality here is even more shocking. Not a single 'super-size' solar PV farm has ever been built in the UK! (For clarification, we are using DECC's latest hyperbole here. In reality, on a global scale even the largest 5MWp solar farm planned for the UK is still relatively small, with plants a hundred times this size being built in a number of countries worldwide). It also takes at least a year to conceive, plan, finance and build a multi-MW PV project, so it is impossible that we could suddenly wake up and find solar farms everywhere, with all the funds dried up.

It is the case that in 2010 8GW of solar power was installed in Germany alone (the same capacity as the entire nuclear fleet currently planned for the UK). However, it did not happen overnight. It took more than ten years for the industry to gather pace, and was carefully controlled by a very responsible German government, which has received enormous benefits to their industry as a result. It is clear that the government have been very badly advised, and it is very likely that they have also fallen victim to lobbyists with opposing views who have hyped the situation, but the facts speak for themselves.

Without any larger-scale PV plants yet built in the UK, this could not have been reason enough for forcing an early review of the FIT in such a damaging manner.

But DECC claims that no large-scale PV projects were expected for three years?

Even withstanding some incredibly poor advice they received from certain consultants, I find it impossible to believe that no one in government expected any large-scale solar PV to happen for at least three years. Are we really expected to believe this? If the government brings into being legislation that supports 5MWp solar power plants, can we really be expected to believe they didn't think (or want) anyone to follow their carefully laid out instructions? Did no one think to look at Germany? France? Spain? Italy? In fact, any country with a comparable FIT? Unless we are to accept that everyone (across all parties) who voted this legislation through is grossly incompetent, this is a very poor excuse that has no legs, so this also cannot be accepted as the motive.

So what is DECC's motive in reducing support for larger-scale PV?

Having removed all the spin and excuses, it's really quite obvious. In fact I was told this by Greg Barker in person several weeks ago: He doesn't believe that solar PV is a suitable technology for the UK. DECC's position is clear. They believe solar PV is very expensive and delivers limited benefits – 'compared to offshore wind for example'.

As a result, rather than pursuing policies that maximise the amount of power generated by PV (which can only be achieved by larger more cost effective PV power plants), DECC is prioritising other perceived benefits of PV, such as social change through environmental awareness by increasing the number of PV systems on domestic roofs. But they are barking up the wrong tree! They are basing their decisions on incorrect facts – solar PV alone could enable us to meet our 2020 targets and beyond!

And it is far from being expensive, as the cost of solar PV is dropping much faster than for any other technology. In the short to medium term it is on a clear path to grid parity!

It's also ridiculous to compare solar PV and offshore wind. It's like saying what's better, a bicycle or an aeroplane? You can't answer the question because they can't be compared – they provide a different service.

Furthermore, the UK has very similar sunlight levels to Germany – Europe's largest market for PV. It's not a question of what DECC officials 'believe', all we ask is that they look at the facts. Solar PV is decentralised energy generation, creating electricity to power a local area. Offshore wind is centralised energy generation, fuelling the National Grid and transporting electrons across the country through a very leaky grid.

When you also take into account the costs of additional cabling, new grid infrastructure, and unavoidable maintenance costs, offshore wind becomes very expensive (though not as expensive as nuclear energy when you include nuclear waste decommissioning costs).

But this is actually a pointless debate. It's not a case of 'either/or'– we need it all. Fossil fuels are in fast decline and by 2016 we are expecting power cuts. We need all the additional low carbon generation capacity we can muster. We need solar power – at all scales. We only have to look at the rising petrol prices beyond our control to see where the real problem lies. So Greg, Chris, Charles (if you're reading), we appreciate you have a job to do, and although these are clearly tough economic times, we all (you included!) have to live with the decisions you make.

No one will thank you in five years time when the lights go out and we're out of other options. Solar PV at all scales is a critical component in powering the decentralised electrical revolution and the transition away from fossil fuels. And to the nuclear, wind and other lobbies with ulterior vested interests – we also share the planet with you, and the impact of your lobbying affects far more than your day job.

We need all low carbon technologies – so in all of our best interests please do the right thing. Put your vested interests to one side and give solar its chance to shine. To everyone who does recognise the benefits of solar power in the UK – please reach out to your MP's, and directly to Greg Barker, Chris Huhne, and Charles Hendry (email addresses below), to help them understand the undisputable facts and benefits PV at all scales can deliver to the UK if it's allowed its time in the sun.

ps.gregory.barker@decc.gsi.gov.uk
ps.chris.huhne@decc.gsi.gov.uk
ps.charles.hendry@decc.gsi.gov.ukADNFCR-1235-ID-800456852-ADNFCR


Discussion Thread  

11 Mar 2011

Any reference to "cost" of the feed-in tariff is down to strange Treasury bookkeeping games. FiT payments are spread back across all electricity users, so are a collective investment in a clean energy supply. European Court of Justice in 2001 confirmed that FiTs are not State aid. They do not involve any expenditure of taxpayers' money, beyond a bit of publicity and regulation, none on the FiT payments themselves.
Dead right about Germany, a country from which we could learn a great deal. I am just completing a PhD thesis on the growth of PV there and outlook for next 5-10 years.


14 Mar 2011

Toddington, good article. I feel that it is significant that there are Severeal Nuclear power stations that have not been built as a result of the 8GW last year and 6GW or so that was there prior. the last thing that the nuclear industry want is a successful Solar FiT in the UK and it is well known how 'influential' they are within the Conservative party particularly.
You are right, it boils down to Greg Barker and the political DECC team believing that commercial scale Solar is not a suitable part of the power mix for the UK (despite it having similar irrdation levels to Germany). As to why they hold this view, look no further than the nuclear industry's lobbying. Their job may be a little harder now as a result of the terrible events in Japan.


reece m wrote:

14 Mar 2011

even if they do decide to go ahead with the nukes(a terrible mistake in my opinion)it will be atleast a decade before we can power a single light bulb from them. by which time the solar industry will be larger and the wind industry will be massive. europes rules on subsidies may come to the rescue as japans situation will keep all the private money away from nuclear untill its too late for the industry. and just to head off anyone who thinks renewables arn't reliable should be aware that nuclear power production collapsed by 26% last year due to problems at different plants. i personally don't see the arguement for nuclear as even though we may not live on a major fault line the plants last for so long that no one can predict the world we will live in by the time they are decommisioned. every one of them could be a potential target in as little as 10 years. never mind 50. i even wish france was a little further away.


15 Mar 2011

My comment should have read, "not been built as a result of the 8GW of solar PV built in Germany last year and 6GW or so that was there prior."

Solar PV power Generation is a real threat to the scale of the industry's anticipated UK roll out. Certainly PV is not a totally equivalent alternative, but PV can limit the number of Nuclear power stations required to be built. Further, it is characterised by reducing costs / kWh whereas Nuclear and most other forms or power gen are characterised by rising costs / kWh.


18 Mar 2011

This isn't going to be a popular view, given the nature of the debate so far, but I think PV is a very expensive way to generate a kWh of electricity. Therefore I can understand why the government might want to limit the scale of it's use to avoid too much money being diverted from more cost-effective carbon reduction or energy generation options.


21 Mar 2011

What do you consider to be more cost effective energy generation than PV?




Discussion Thread  

 


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