In May this year the government launched a consultation on support for community energy projects under the Feed-in-Tariff (FITs) scheme. Part of that consultation sought views on proposals for increasing the maximum specified capacity ceiling for eligible community projects from 5MW to 10MW. The government's response to the consultation has now been issued. It has been decided that support for community energy projects under the FIT scheme will not be increased. Instead, the government is going to implement a package of new measures under the existing FIT scheme which will, it claims, have a positive effect on the community sector.
Why has the government decided not to increase support for community projects under the FIT scheme?
If the government is not increasing support via FITs, what is it doing?
The government is introducing a number of new measures for community energy projects up to 5MW under the current FIT scheme. These are intended to make a practical difference to communities trying to deploy projects, and can be introduced quickly. The measures set out in the consultation response involve:
It is envisaged that the legislation to implement these changes to the FIT scheme will have effect from 1 April 2015.
The government also intends to:
What about projects over 5MW?
Community projects of over 5MW will not receive additional support, and will have to continue to apply for support under the existing regime. Support is currently available under the Renewables Obligation (RO) scheme, although this scheme will close in April 2017 (and earlier, in April 2015, for solar projects). Support is also available under Contracts for Difference (CfD), and community projects over 5MW will have to apply for support via the CfD process once the RO has been phased out. See update on the Government response to solar PV consultation for further information.
The government envisages that its proposals in relation to the shared ownership of onshore renewables projects will also assist in the deployment of more community energy schemes. See article on what community involvement means for onshore wind developers in our renewables newsletter for further information.
"The recent publication of the Shared Ownership Taskforce report demonstrates the increased impetus behind community energy. Instead of seeing the fact that the FITs support will not be increased as a potential barrier, let us consider the measures the government will introduce as a counter balance and the recent confirmation from DECC that community groups and commercial developers will be able to share a grid connection for jointly developed renewable electricity projects under the Feed-in Tariff. You could conclude that what we are actually seeing is the creation of a powerful incentive to co-develop schemes with community groups." Maria Connolly.
Contributor: Alexandra Holsgrove Jones
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