DECC launch FIT review

[The Solar King]

This is what to watch for in any announcement this week, that is, on top of the tariffs:

How high or low are caps, and will this cause a stop start market?
Has a pause been implemented, and if so when will new tariffs come into effect?
Any new limit on maximum project size?
What is the overall budget for solar?
Any change to indexation (CPI)?
Introduction of export metering?
Any changes to energy efficiency requirements (EPC C)?

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[Gavin A]

what's this 'pause' thing, and is it actually something they could legally do? I can't see how they can do anything without going through the parliamentary SI process.

 

[The Solar King]

Apparently they can introduce a pause at 21 days notice. It is possible they could do this to stop any further last minute rush. I think the ability to do this is in the FITs primary legislation. TedM may be better placed to inform on this one.

 

[Gavin A]

Apparently they can introduce a pause at 21 days notice. It is possible they could do this to stop any further last minute rush. I think the ability to do this is in the FITs primary legislation. TedM may be better placed to inform on this one.

I can't see anything in the Energy Act 2008 that gives the secretary of state any such power, if this possibility has come from DECC then I hope they've been challenged to provide the legal justification for it and warned they'll face legal action if they do this without having the legal right to do it.

If this right existed they would surely have used it in 2011/12.

The Secretary of State may exercise the power in subsection (1) for the purposeonly of—(a) establishing, or making arrangements for the administration of, ascheme of financial incentives to encourage small-scale low-carbongeneration of electricity;(b) requiring or enabling the holder of a distribution licence to makearrangements for the distribution of electricity generated by small-scalelow-carbon generation;(c) requiring the holder of a licence to make arrangements related to thematters mentioned in paragraph (a) or (b).

They might attempt to argue that a 'pause' is part of the administration of the scheme, but I doubt a court would agree with them.

A pause would be withdrawing the scheme entirely for a period, which has no basis within the legislation - that entitled the secretary of state to establish and administer the scheme, it doesn't give them the power to withdraw the scheme - that would need primary legislation.

 

[Worcester]

Well, anybody else hear Amber Rudd after the Paris conference, looks likes she's going to make businesses pay to meet the targets, so expect to see higher carbon taxes and an investment by businesses to look at ways of offsetting that.. No way is she going to put any more government money into it. She'll instead penalise generators and consumers, no more carrots, just big sticks, and of course those penalties will be passed on to the household consumers through the bills...

 

[Gavin A]

given that osbourne has just pulled the FIT and renewable support costs from energy intensive industries, and they previously robbed a £billion or so from the carbon reduction commitment tax that was supposed to all be recycled back to fund the companies achieving the best levels of carbon reduction.... I don't see that there's much joined up thinking going on there.

 

[TedM]

As mentioned before, there is a general 21 day rule for laying SIs before Parliament but, given the wording in the Energy Act 2008, I can't see how that can apply to FiTs. There is even an exception that allows the 21 day rule to be over-ridden with ministerial approval.

Anyway, we do not have long to wait now.

 

[Energetic]

An email from Merlin Hyman from Regen SW....


We are now expecting the FIT review announcements at back end of next week – most likely on 17 December. In response to queries from members, below are our best assumptions into what to expect.

1) Timescales

Amendments relating to the administration of the scheme e.g. implementing budget caps will be made by amending the FIT's Order and will take 21 calendar days from the laying of the instrument in Parliament to come into force. This takes timescales to early January as the earliest date for changes.

Amendments to the tariffs and the degression mechanism will be made through amending the Licence Conditions. This takes 40 days from laying before Parliament, excluding time when Parliament is not sitting, to come into effect. This takes the timescale to mid February.

However, given the speed at which deployment is currently occurring, DECC will be very strongly motivated to make tariff changes earlier than mid February. This suggests that they will be seeking ways to act earlier – for example using the FIT Order to implement a ‘pause’ from early January to the scheme until new tariffs take effect.

2) Budgets and Life of the FiT scheme

In the consultation, DECC referenced a figure of £75-100 million as the remaining FIT budget from 1 January 2016. We do not expect this to rise. However, there has been concern that this budget would be taken up by the rush of deployment prior to the cuts and with very little if any left within the scheme there is the potential that it will close.

We are confident that the scheme won’t be closed and hopeful that the budget for 2016 onwards has been protected. Given where we were at the start of the consultation, with the government determination to controls costs, this would be a considerable success for the lobbying effort many have contributed to.

3) Communities

The EU State Aid approval for the FIT limits DECC’s ability to ‘discriminate’ between different classes of customer. For that reason we don’t expect "a community FiT". However, we do think it likely that community pre-accreditation will be re-introduced.

4) Tariff levels

We expect some tweaks to these based on improved evidence submitted under the consultation – and also to indicate (to Tory backbench MP's in particular) that DECC have ‘listened’ to their concerns.

5) Renewables Obligation (ROC's)

The decisions on the changes to the RO to exclude sub 5MW solar will be announced at the same time as the FiT review Government response. These will be much the same as proposed in the consultation.

Finally, as you may be aware we have a reception for our ‘Entrepreneurial Women in Renewable Energy’ at the House of Commons on 13 Jan which is an opportunity to hear direct from Secretary of State, Amber Rudd MP.

More details about the event and how to book can be found here.

Kind regards,

 

[Gavin A]

However, given the speed at which deployment is currently occurring, DECC will be very strongly motivated to make tariff changes earlier than mid February. This suggests that they will be seeking ways to act earlier – for example using the FIT Order to implement a ‘pause’ from early January to the scheme until new tariffs take effect

Does anyone know if this is coming from DECC, or merely people regurgitating the same rumours?

There is no such power within the FIT order, all the powers within the FIT orders come from the Energy Act 2008, so any modifications have to be done using the specified 40 day notice period.

As far as I can see there is no power to 'pause' the scheme, the only powers are to set the scheme up and administer the scheme, not withdraw access to the scheme entirely, that would require primary legislation not even a SI.

I'm feeling a legal notice before action might be needed here to head this nonsense off before DECC balls it up again.

 

[Somecamel]

I suspect this email was sent 'last week' rather than this week and how much can change in a day eh

From what I can gather this is the run up...

Energy and Climate Change Committee

Wednesday 16 December 2015 Meeting starts at 10.00am

Parliamentlive.tv - Energy and Climate Change Committee

Thursday 16th December 2015
Announcement - That could be anything at this stage I reckon.

After Paris there seems to be a lot of media attention about the way the Government are bordering on hypocritical signing this 'historic' deal....... whilst at the same time cutting off the alternative energy sector.

Amber Rudd on the Marr show being grilled by Emily Maitlis is an interesting watch. (fast forward to 24 minutes in).

BBC iPlayer - The Andrew Marr Show - 13/12/2015

I'm fed up of the whole charade, as I'm sure the rest of you are, this is craziness what they've done to this industry in the past few months.

I'm hoping for a positive outcome but it doesn't help in short term with trying to run a business and not really knowing if you can book any jobs in January.

 

[Gavin A]

Have posed the question on twitter re this pause nonsense, see if it either gets a response or at least gives someone pause for thought.

 

[Worcester]

That interview was the one I referred to: At 27:15 she says "Businesses are going to have to pay for this" ... no way govt will fund it, as far as this government is concerned it's all going to be stick, no more carrots..

She's going to hit the generators / big six and big consumers to make them install renewables.

And she thinks that if it's coming direct out of the businesses pocket the installation costs will come down, i.e the rates we are all charging for installations are inflated because of FiT / RHI..

Also she hit out at the fact that a large number of installations e.g solar farms are actually owned by non UK companies, so the subsidies are going to them. (Conveniently forgetting about the mutli £Billion China involvement in nuclear..)

 

[TedM]

Talking of the 'FiT Order' is a little unclear. The current 'FiT Order' is just the main 2012 Statutory Instrument - The Feed-in Tariffs Order 2012 which was laid before Parliament 21 calendar days before it came in to force in 2012 and since amended by other SIs.

Any change to tariffs that are to be implemented before 1st April 2016 will now have to be done by a SI change, as that existing 2012 Order sets out (article 16) the dates that tariff changes (implemented in Standard Conditions) have to be published by, and the deadline for any 1st January change was 1st November and other changes are only allowed on the specified quarters.

So there will have to be a new SI aka 'FiT Order' to change any of those dates.

The question is whether DECC can do that using the 21 day rule from the SI Act or if the 40 day rule from the Energy Act 2008 applies. If they lay a new SI before Parliament on 17th December then there will only be 3 sitting days and 18 non-sitting days in the 21 calendar days allowed making implementation on 6th January the earliest.

 

[Somecamel]

Well that bloody worrying

 

[solarsavings]

Somecamel, It is bloody worrying as you say and despite being asked to quote for installations before the deadline (whenever that might be) we can't take the risk.