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Small wind industry left ‘aghast’ by FiT reduction

Published: 24 July 2012 - Joe Bush

Kevin Parslow of Evance Wind, has responded to DECC’s announcement last week that there will be a reduction to the Feed-in-Tariff (FiT) for small wind turbine installations, by stating that the decision will undermine the future of the UK small wind industry.

He commented, “The UK government is to reduce the Feed-in-Tariff rate by 25% to 21p, from 1st December 2012. Yet only a few weeks ago Japan implemented a FiT rate of over 45p/kWh for small wind, showing support for an emerging sector.

“The government also plans an additional annual reduction - five percent reduction is for ‘expected’ deployment and this could rise to 20% reduction with ‘very high’ deployment.

“With the figures used there is blatantly only a plan to implement the 20% level as the figure for ‘expected’ deployment is at a level last seen in 2007/08 (before FiT) and ‘very high’ deployment is at a level less than two-thirds of the deployment in 2011.

“The FiT scheme was implemented to encourage the adoption of renewable energy and to stimulate the embryonic industry. Small wind picked up the challenge and has been investing heavily to try and reduce costs, but it is early days, the volumes are not in place to drive down costs significantly at this stage.

“A particularly strong UK manufacturing supply chain, has secured an initial growth - despite current economic conditions. DECC’s decision will now unfortunately lead to reduced manufacturing levels, prevent investment over the next three to five years and inevitably put jobs at risk. We are very disappointed with the silence on these issues from BIS who claim to support UK manufacturing.

“We can only assume that despite in-depth consultation with the small wind sector, DECC has chosen to disregard our evidence-based representation and instead decided to pursue its own agenda which is likely to disadvantage the individual consumer and the fuel poor. Even though the secretary of state Edward Davey has talked about the Feed-in-Tariff existing to ‘enable as many people as possible to benefit from the scheme’.

“Due to the sheer volume of installations worldwide the PV sector in the UK has been able to benefit from dramatically reduced manufacturing costs. Therefore the government had to take action as the FiT rate was disproportional to the manufacturing costs. With the worldwide small wind installations less than 0.1% compared to PV installations, small wind is yet to benefit from any significant manufacturing cost reductions. So surely now is not the time to cut FiT.

“PV already consumes over 90% of DECC’s FiT budget. Small wind was never in any danger of overshooting the deployment that DECC had set for it - only taking five percent of FiT payments.

“As a country that has around 40% of the total European wind energy and leads the world in the design, manufacture and installation of small wind turbines, we unfortunately have a government actively discouraging the adoption of small wind, as well as hurting the industry that supplies it.

“This announcement has left the small wind industry aghast, so we will be seeking urgent talks with DECC to clarify the situation.”



 
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