Solar FIT Fast Track Review Update – Re: Yesterday's conversation with Chris Huhne
25 Mar 2011 02:03:26
By Toddington Harper, Managing Director www.LowCarbonEconomy.com
Yesterday I was invited to attended the CPRE (Campaign to Protect Rural England) Annual Lecture 'Beauty, Tranquillity and Power Stations?' Where Rt Hon Chris Huhne, Secretary of State for Energy and Climate Change was the guest speaker.
His speech was impeccable – everything he 'said' about the transition to a low carbon economy made sense, but up until my question he avoided the subject of the Government's destructive fast track review of all solar PV projects greater than 50kWp. Before we get onto that, I thought it would be useful to share some statements I wrote down from his speech:
------Start of Chris Huhne's Statements-----
- We are looking forward to a low carbon future
- There are many different parts to that destination – clean green power
- The energy choices we make now will determine the shape of the landscape for many generations to come
- Over the next decade we must rebalance our energy system
- We must generate 15%from our energy from renewables by 2020
- It is important to not forget why we are doing this – climate change is the biggest issue facing the natural environment
- It's not just about future climate risk – the climate is already changing: spring comes sooner, autumn later, etc
- We can now clearly link extreme weather events and the rise in greenhouse gases
- The threat posed by climate change is too big and too close to ignore
- We must do everything we can
- We must also make the case for the low carbon energy revolution at home
Our plan for low carbon energy rests on 4 pillars:
- New nuclear without subsidy
- Clean coal and gas
- Energy saving
We need to spread the risk:
- Wind, wave, tidal stream will get extra support
- Our flagship programme is the "green deal" – the most comprehensive energy plan in the world
- Heating accounts for nearly half of our emissions
- We are supporting electric air and ground source heat pumps
- Nobody knows what the energy mix will look like in 40 years time
- A portfolio approach to energy is so critical
- Carbon targets are absolutely necessary
- There is no silver bullet that will solve our energy problem - will need to make some difficult decisions as every energy resource has its own drawbacks
- Onshore wind is the cheapest – even cheaper than first generation nuclear
- Hydroelectric power can help though at the very top end could contribute just 3%
- Interconnection needs big interconnectors – big big cost
- We will need to look at pumped storage, demand management, smart grids, energy saving measures, air source heat pumps
- The reality is that the scale of the problem and the required solutions mean that the landscape will be changed
- We must embrace the low carbon future
How can we deliver this:
- First step is to listen to the experts
- We cannot let market forces run wild
- Sites for new nuclear subject to assessment
- We need to strike a balance between economic and environmental impact
- We are also making big changes at the top level
- It's about developing a consistent and strategic rationale
- We are opening up big decisions more than ever before
- Sometimes we will have to make tough decisions
- You will always have a voice in the room
- In the next few months we will publish the renewables roadmap – how we can meet the 2020 targets
- Rather than being a fixed document it will evolve and change
- We know the choices we make about energy generation stay with us for years
- Our current energy system is costing the earth
- For the first time in Britain we have the chance...
------End of Chris Huhne's Statements-----
Having heard so many words of wisdom, I asked a question pointing out that whilst what he just said made so much complete sense, some of the Government's actions are entirely contradictory, such as the recommendations from DECC last week which effectively kills all free-standing solar projects, and any roof mounted project above 250kWp… i.e. he recognises the major objective is meeting 2020 energy targets to address climate change, that there is no silver bullet, and we need a portfolio approach with all options – yet they are 'picking a loser' by taking the utility-scale solar option off the table – which delivers the most cost effective carbon savings …. So I went on to ask: what exactly is it about large-scale solar PV that the Government is so against?
Mr Huhne's response was pretty in-line with previous comments – pointing out that the Government had previously not anticipated any solar PV above 10kW for 3 years (whilst I reluctantly have to accept that this is the case – does anyone know who provided this incredibly poor advice? And are they still providing it???), and as a result they had set budgets accordingly which were in great danger of being swallowed up by larger scale PV projects, hence they had to act.
He then said that actually 50kW of solar PV is not small – referring it to 2 x tennis courts – which he said was large – and that anything under this size is not at all affected… this however is a further inaccuracy – any size freestanding project whatsoever is not financially viable under the Government's new plans.
I had the opportunity after the event to spend some time with Mr Huhne, coming back on his points and asking additional questions:
I pointed out that whilst we have to accept that the Government did not expect any large-scale PV to happen, it doesn't make it any less valuable. I.e. He is very clear that we have a very big problem, and naturally this calls for very big solutions – including solar PV at all scales. For example, many hospital roofs are can comfortably accommodate 500kW–1MWp of PV (in-line with the electricity demands of the buildings), and in such circumstances 50kWp is pretty pointless as it doesn’t correlate to the energy demands of the building.
He also didn't seem to appreciate that any freestanding project would no longer be financially viable, or that any roof mounted project greater than 250kWp would also not be viable. He pointed out that the prices of PV are falling… I was very clear that from the evidence in the market today, including projected reductions in price, that he needed to clearly understand that their suggested reductions completely destroyed any >250kWp or free-standing PV installations from happening in the UK.
He reiterated that this was only intended for homeowners, and added that commercial-customers should be treated differently… (interesting – so why is it that no-one is worrying about 500kWp wind turbines under this scheme?). He also made the point the subsidy was set in-line with offshore wind… I responded that this is not a logical comparison as offshore wind provides centralised power, whereas PV provides decentralised power that brings additional benefits, and that the only reason why offshore wind is viable with much lower-cost-per-unit subsidies is because of scale, with projects greater than 1GW v.s. the paltry 251kWp required for PV to receive the same intended subsidy.
He then pointed out to me that we clearly needed to respond to the review. If you haven't already done so, please do, by going to the following page:
As a final couple of thoughts, it is clear that the Government is committed to this agenda, as they are rectifying a situation that they 'did not anticipate'. I think the focus now should be helping Government to understand the substantial advantages of larger-scale solar PV as part of the UK energy portfolio, and how this should be supported, irrespective of whether they anticipated it or not.
The conspiracy theorist in me is also increasingly sceptical, as removing the financial viability of the only PV option that has the potential to generate and export significant quantities of energy to the grid (i.e. all free-standing PV) focuses the mind as to who may really be behind driving this agenda…