When is March 2016 not March 2016?

Well, look, what can I say other than sorry? You might have noticed (if noticing things not happening can be bracketed in the same way as things happening) that nothing has emanated from Alan’s Energy Blog since…er…the beginning of February. A small interruption in the shape of a particularly enervating General election campaign did occur it is true, but that is really no substantive excuse for not putting stuff out.

So for all my several avid readers, here’s something new at last, and to achieve this, I thought I would proceed with an obscurity. Well more a starry eyed question, really, and that is this: Has the Secretary of State actually stopped the giving out of Renewable Obligation certificates after March 2016 by saying in a written statement that there will be no RO certificates after that date? There has, of course been a justifiable storm, on the day of the statement, about its effect: a good piece by Julie Elliot MP in Business Green  sets out just what damage such a knee jerk, ill thought out piece of reverse engineering will do to the wind industry and to the cost of renewables. I concur with all that, but my question is, in the rush to produce this handbrake turn has the Sec of State actually done what she thinks she has?
I ask this because there is, in the nether regions of her statement, this curious phrase:

‘I am therefore announcing today that we will be introducing primary legislation to
close the RO to new onshore wind from 1st April 2016 – a year earlier than planned.’

So the Minister is going to legislate to close entry: which I guess she will have to do because there exists already a piece of secondary legislation which states that no new RO certificates are to be issued for electricity generation after 31st March 2017. Or to put it another way; ROs WILL be issued up until that date. The secondary legislation in question is the Renewables Obligation closure Order 2014 (no. 2388) which seems to have been passed in a bit of a panic by then DECC minister Matthew Hancock to ensure that the RO really did close in 2017: and to make sure it did he (unusually) put the date on the face of the legislation. And there it is; no ifs, no buts, no ministerial discretion, the RO closes on 31st March 2017.

So let’s then think for a moment about the passage of the legislation – Primary legislation, that is, – that the minister has in mind. That will be the forthcoming Energy Bill rostered to appear in this session. Let us say it starts its passage through Parliament in late autumn: after all its stages it will probably get royal assent ..ooh around next summer, after the magic date of April 2016 has passed, but obviously, before the former magic date of March 2017 has appeared. And meanwhile, as far as I can see the RO closure Order of 2014 chugs on until such time as it doesn’t. So maybe we’ll find ourselves in the difficult situation of having to give out ROs in the spring or summer of 2016 because the law says we have to, even if the Minister says we don’t. I wonder if that has been budgeted for? Just asking.

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Why field solar might need Michael Gove

I know, it’s rooftop solar, but it is Michael Gove...

I know, it’s rooftop solar, but it is Michael Gove…

The solar trade world is rightly up in arms about the latest lurch in solar PV funding policy from DECC. This time it is set to tip field solar deployment off a cliff. Policy lurches are always a bad idea in the development of new forms of energy production, where the need to have a calm and measured forward regime for development, investment and deployment is central to the prospects of a technology gaining sustainable momentum. And solar in the UK has suffered more than most from a lack of such certainty but it has (just about) been possible to excuse changes in feed in tariff, or limits to eligibility as constituting a response to the escalating competitiveness of newer solar installations. However, this latest change in policy, on any reckoning, just looks plain daft.

Firstly, it rips up an assumed eligibility and timeline for medium sized PV to access Renewable Obligation support, and makes what must be a virtue of medium scale PV – namely that it can be deployed over a far faster time scale than many of its comparators – an assumed drawback of. All those people who started to bed down lines of investment, and development BECAUSE it now is investable and relatively quick in maturing must now, presumably turn their attention to less clear investment planning.

Secondly, the claimed plan of a transition from field solar to medium sized rooftops when existing funding for rooftop deployment has barely been touched doesn’t bear scrutiny for more than a few nano-seconds. Field solar stands or falls already by local planning decisions, and indeed, part of its development drive derives from the ability it offers local energy providers to proceed with community level generation, with planning and local reward working together. If you want to shoot community energy through the head, this is not a bad way to start, but more of that shortly. It is frankly not likely that community schemes will be able to easily source the roofs of ASDA distribution centres as an alternative to free standing schemes – this may be why medium size roof solar is not taking off.

Thirdly, I write at a time when there is a national debate emerging about what capacity we will need for electricity generation over the next few years.  Pulling the plug on nailed on capacity that can be deployed at speed, and not at some undefined, distant period in the future like much of the proposed capacity increases seem to pencilled in for, looks to be just plain perverse. We are, after all, (according to the DECC RO closure impact assessment) looking at likely forward new capacity of up to SIX GIGAWATTS by 2017. Even when we take account of differential capacity margins between solar and, say…gas, this amount of capacity represents the equivalent availability of at least a couple of gas fired power stations.

But of course, this decision/consultation is not about energy logic. It is (as the consultation document and the impact assessment makes clear) about the increasing probability that larger scale solar, and solar as a whole, is proving to be a success. This means it is now eminently capable of contributing far more to the nation’s capacity requirement than envisaged even a few years ago, and particularly at the time DECC signed up to the infamous, and I am afraid, soon to be unworkable, Levy Control Framework. Breaching the bounds of this framework, regardless of energy logic, is now to be the starting and finishing point for all renewable energy policy, it seems. Except, of course, that when the Levy Control Framework was agreed with the Treasury, it was done so on the basis that there should be a 20% ‘leeway’ for spending as the framework rolled forward. It now appears, this leeway is gone and that the tightest interpretation of the framework is the ‘central case’.

And in case there is any doubt about the centrality now of this new logic, we need look no further than the other consultation launched by DECC on the same day, on a very good scheme to raise the ceiling for the eligibility of community-based projects for FiTS from 5MW to 10MW. That is community wind, PV, hydro and anaerobic digestion.  Really welcome, one might think; medium size community schemes, now eligible for FITs. Much more user-friendly and likely to drive greater renewable deployment…

Ah sorry have to stop you there – look at the impact assessment for this consultation.

Here is, transposed in its entirety and with no editing by me, the content of the box on the impact assessment headed ‘what are the policy objectives and the intended effects?’

‘The objective is to increase deployment of 5-10mw community onshore wind, solar PV, hydro and anaerobic digestion. There is, however, no new funding available to support any additional net renewable electricity generation that might come forward between 2015 and 2020 as a result of the proposed policy change. Affordability will therefore be an important consideration before deciding whether or not we could proceed with implementing the proposal’.

And all this in a week when over in another department, a Secretary of State has just, with impunity, apparently switched £400 million from one budget heading to support the budget of his pet Free School project which, he explains, has to be treated this way because it is ‘demand led’.

Hmmmm…Michael Gove for Energy Secretary anyone?