Subject: Message from ORED
Reply-To: Department of Energy and Climate Change <firstname.lastname@example.org>
Dear Renewable Energy Partners,
The Government is today publishing its decision on the levels of financial support that will be available through the Renewables Obligation (RO) for large-scale renewable electricity generators from 2013-17. This follows a comprehensive, rigorous and evidence-based review of RO subsidies carried out over the last 18 months.
We received nearly 4,000 consultation responses and substantial amounts of new evidence from a wide range of stakeholders as part of a public consultation process. We would like to take this opportunity to thank all those who submitted formal responses or took part in the review in other ways.
The full response confirming RO bands for 2013-17 along with the Impact Assessment and associated documents can be found on the DECC website:
The package provides the level of support for renewable electricity that the evidence shows is needed.
- Support for onshore wind from 2013-17 will be reduced by 10% to 0.9ROCs, as consulted on last Autumn. This level is guaranteed until at least 2014 but could change after then if there is a significant change in generating costs.
- We recognise the risk that costs could fall more or less swiftly than expected. The Government will therefore undertake a call for evidence on onshore wind costs in the Autumn, reporting in early 2013. If the findings show that one or more of the statutory grounds for a further review exists, for example that there is a significant change in generating costs, the Government will expect to initiate an immediate review of support levels for onshore wind. Any new arrangements arising from a review would not take effect before April 2014, and there would be grandfathering and grace periods to protect financial commitments. In any review of support levels, Government would follow the process of public consultation, and our approach would be as rigorously evidence-based as it has been in the current banding review. We want to ensure that industry have the policy stability that they require to continue to invest.
- While the majority of the public supports the growth of onshore wind in the UK, we recognise that there are concerns from some communities about deployment in their area. Therefore the call for evidence will also examine how communities can have more of a say over, and receive greater economic benefit from, hosting onshore windfarms. For example, through measures to improve local consultation by developers, enabling local businesses to participate more readily in the economic supply chain, and innovative ways to reward host communities.
- Support for offshore wind will remain at 2 ROCs/MWh for new accreditations in 2013-14 and 2014-15. As costs of offshore wind come down, rates of support will also be brought down. Support will be set at 1.9 ROCs for generating stations accrediting (and additional capacity added) during 2015-16 and to 1.8 ROCs in 2016-17.
- On biomass electricity generation the support level for conversion of coal powered plants to biomass is maintained at 1ROC/MWh, recognising the cost effective renewable energy generation and carbon emission reduction benefits that the technology can deliver. Support for enhanced co-firing has been adjusted to stepped levels that better reflect the cost elements of different co-firing levels and what is affordable (for both enhanced and standard co-firing) within the framework. Alongside all these changes the definition of conversion and co-firing will allow for unit by unit changes within a power plant, providing more flexibility to generators to move to full conversion over time. We have also retained a cautious approach to new build dedicated biomass aimed at bringing forward only limited deployment, holding to the 1.5ROC support level degressing to 1.4 in the final year, and there will be a further consultation shortly on a dedicated biomass cap and on further tightening of the greenhouse gas standard in the near future. We are maintaining support to a range of energy from waste technologies. The future developments of the market are extremely difficult to predict and there is a risk that increased demand from bioenergy could lead to price rises for certain biomass feedstocks. We will therefore be working with large power generators on a voluntary disclosure process on the future demand for domestic feedstocks in order to give confidence to the wood products industry and its investors that domestic supplies of feedstocks will continue to be available.
- Support levels for marine energy will more than double from 2ROCs to 5ROCs per MwH. This level of support will only be available for up to 30 MW of installed capacity at each generating station and is only available to generating stations accrediting from 1 April 2013 to 31 March 2017, and to additional capacity added during that period. The level of support for installed capacity above 30 MW will be 2 ROCs/MWh.
- There will be no immediate reduction in support for large-scale solar, but there will be a further consultation this year on reduced support levels given recent dramatic falls in costs.
We are all concerned about consumers' bills and it is vital that support for renewable electricity represents good value for money. That is why compared to current bands, today's announcement represents better value for money – we are getting more renewables at a cheaper average cost.
In announcing the Government response Edward Davey, Secretary of State for Energy and Climate Change, said:
"Renewable energy will create a multi-billion pound boom for the British economy, driving growth and supporting jobs across the country."
"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."
We would also like to bring you up to date on our latest analysis for jobs and investments in the renewables sector which shows that since April 2011 there have been around £11.3bn confirmed and planned investments with the potential support of around 22,000 jobs. We expect that the support we are announcing today will bring forward a further £20 to £25bn of new investment in the next four years.
Further information, including a renewables jobs and investment map is also available on the DECC website.
Finally we thought you might be interested in the first wave of results from DECC's public attitude tracking survey that have recently been published. The survey tracks public opinion on DECC's main business priorities and the views on renewables are generally positive. The headline results on renewables are:
- Eight in ten (79%) said they supported renewable energy for providing our electricity, fuel and heat, with 32% strongly supporting. Just 5% opposed renewable energy.
- Seven in ten (69%) agreed that renewable energy industries and developments provide economic benefits to the UK.
- Almost eight in ten (78%) agreed that renewable energy developments should provide direct benefit to the communities in which they are located.
- A little over half (55%) agreed that they would be happy to have a large scale renewable energy development in their area.
- Perceptions of a range of renewable energy sources were all positive. Highest levels of support were found for solar (83%), offshore wind (76%) and wave and tidal (75%).
- On-shore wind had good support (66%) so too did Biomass (64%).
Further information can be found on the public attitude tracking survey on the DECC website.
Chief Executive, Office for Renewable Energy Deployment
Chair, Office for Renewable Energy Deployment
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