Feed-in tariffs are a wonderful incentive to decarbonise the economy through local micro-generation of clean electricity. Individual households and companies can generate electricity and get paid for feeding it into the National Grid and therefore cut their bills as well as receive a net payment for the effort.
However in the long-term feed-in tariffs will have function alongside the markets and nothing can successfully live in a parallel universe without a reality check of market prices. In France EDF (Electricite de France) has promised unrealistic feed-in tariffs to solar energy providers, at around 10 times the wholesale price per megawatt per hour produced, which is obviously not a sustainable business model for the company.
(The spot price is about 55 euros per MW/h and EDF pays 546 euros to small-scale suppliers. It is costing £1bn of losses a year).
It has led to an extraordinary escalation of supply, leading to farmers covering barns with solar panels and concentrating more on generating electricity than their own farming business. EDF receives 3,000 applications a day to connect to the grid.
The forecast is that by the end of this year France will have met its solar energy target for 2020.
In the UK, feed-in tariffs are at the other end of the spectrum, with payments set at £4.13 per megawatt per hour, far below the spot price. Therefore the utilities get much better value for the solar energy (or the supplier is short-changed, depending of how one looks at it).
Clearly the long-term sustainable model will be one where feed-in tariffs converge closer to the spot price and vary accordingly. www.carbonica.org
No comments:
Post a Comment