Presentation on theme: "Session ‘Effect of FiT on small hydro’ Adrian Loening Director: Mór Hydro Ltd."— Presentation transcript:
Session ‘Effect of FiT on small hydro’ Adrian Loening Director: Mór Hydro Ltd
Mór Hydro Micro Hydro development; Investor Technical Design Project Management Due Diligence 2012 Workload 3 Schemes under construction 1 Scheme refurbishment 2 Schemes in development Developed from Carbon Trade Ltd – 20 years experience in biogas and hydro development
Feed in Tariff So far so good! Band (kW) Current generation tariffs (p/kWh) Consultation tariffs from Oct 2012 (p/kWh, 2012 prices) Final tariffs from 1 Dec 2012 (p/kWh, 2012 prices) Community energy tariff =<1521.921 >15=<10019.619.719.6 >100=<50012.1 15.5 >500=<200012.1
Feed in Tariff Degression Proposal – 5% reduction on; April 2014 OR when capacity is 55MW April 2015 OR when capacity is 73MW Descision Baseline degression of 5% per year from 2014 Predicted Annual Deployment Lower degression of 2.5% if less than 75% of Predicted Higher degression of 10% if greater than 150% of Predicted Even greater degression of 20% of greater than 300% of Predicted
Feed in Tariff - Degression Predicted deployment is 16.66MW annually Degression band 2.5%5%10%20% ≤12.5MW>12.5 – 25.0MW >25.0 – 50.1MW >50.1MW
Feed in Tariff - Degression BHA Annual Conference, 2012 When is Degression triggered? For <50kW sum of DNC Recorded on MCS Database For >50kW sum of TIC recorded on Renewables and CHP database Note: in neither case is a project necessarily accredited for FiTs. Early trigger also if deployment exceeds 2/3rds of annual predicted in first 6 months of each year
Feed in Tariff – Pre-accrediation BHA Annual Conference, Glasgow As promised Hydro schemes can be pre-accredited for FiTs Requires; Planning Consent CAR Licence Acceptance of a ‘Firm’ Grid connection offer What is a ‘firm’ grid connection offer? Without transmission constraints? Paid the deposit? Pre-accredited projects count towards degression triggers
Feed in Tariff – Pre-accreditation BHA Annual Conference, 2012 Projects must pre-accredit by 1 st Jan in any year Pre-accreditation between 1 st Jan and 31 st Mar are given FiT rate for the following year (inc. any degresssion) Do not yet know the exact process of pre- accreditation but assume ROO-FIT form minus. Pre-accreditation lasts for 2 years Pre-accreditation may be withdrawn Decrease in capacity allowed – increase is not Pre-accredited projects count towards degression triggers
Pre-accrediation BHA Annual Conference, 2012 Page 108 para. 4 “Tariff lifetimes will apply from the eligibility date.” Page 108 para. 5 “Tariff lifetimes will still apply from the installation’s commissioning date”
Is it a better FiT? BHA Annual Conference, Glasgow So has this made the FiT better or easier? Yes and No! More games to play! Some certainty / some confusion Pre-accreditation triggers degression So we don’t want lots of pre-accredited projects Do cancelled pre-accredited projects ‘un-trigger’ degression? Example:
BHA Annual Conference, 2012 Year 2014 Installed capacity in year is at 22.6MW ‘Abighydro’ project 3.5 MW additional is pre-accredited before 1 st Jan 2015 Year 2015 Tariff reduced by 10% instead of 5% A further 16MW Accredited / Pre-accredited during year Year 2016 Tariff reduced by further 5%
Example BHA Annual Conference, Glasgow 2016 – ‘Abighydro’ is cancelled or pre-accreditation lapses 16MW of ‘2015’ vintage hydro have lost 5% of FiT payments. @40%load factor and £115/MWh FiT around £322K has been lost through no fault. My guess is there will be no correction for this.
New Questions / New Tricks? BHA Annual Conference, Glasgow What happens if you pre-accredit in one band but final commissioned size is lower band? Cancel pre-accreditation and re-accredit – lose the pre-accreditation benefit What happens at two year limit without commissioning? Cancel pre-accreditation and re-apply for pre- accreditation Better still: Pre-accredit on 1 st Jan, cancel and re-pre- accredit on 31 st Dec Both potentially adds to degression twice!
Old Tricks BHA Annual Conference, 2012 Has the new FiT band stopped down-sizing? Some projects >500kW are being downsized No projects = 100kW have been upsized? Unless you know better! Is the new FiT band a good thing? Broadly yes – it is what we have been asking for Does the new FiT mechanism solve uncertainty? Not for marginal projects Not for ‘long development’ projects
Now for something completely different BHA Annual Conference, Glasgow Scottish Government targets for low carbon transport Many Hydro projects are near public roads (typically at bridges) The Energy Saving Trust will grant up to £10,000 to businesses installing Electric Vehicle Charging Please consider applying for this. See www.EVA-Scotland.Org or http://www.energysavingtrust.org.uk/scotland/www.EVA-Scotland.Org http://www.energysavingtrust.org.uk/scotland/