AHDB News June 2017

Look inside... 03 04 Duis aute irure dolor in reprehenderit » » Lorem ipsum dolor sit amet, consectetur » » Duis aute irure dorepre » » Lorem ipsum dolor sit amet » » Ros augiam, velesed dolorer si » » Ut alissit alit iure feu faccum nul lutatie » » Lenismod magna alisi eraese » » Energy Use in Horticultu Accor ing t CCL Data Renewable Heat Inc ntive (RHI) reforms Energy Effici ncy an the Seven ‘C’s Controlling radiation heat loss Energy Market Updat FOR THE HORTICULTURAL INDUSTRY NOVEMBER 2016 EnergyNews for the horticultural industry June 7 End of the road for The ROC Scheme The Renewable Obligation Certification (ROC) scheme closed its doors to new applications on 1 st April 2017. So, what does that mean for sites seeking to install renewable and low carbon electricity generators going forward? The ROC scheme was designed to incentivise renewable electricity generation in the UK. This included technologies such as Solar PV, Wind and Anaerobic Digestion as well as Biomass Combined Heat and Power (CHP). Whilst this was superseded by Feed in Tariff (FiT) for small-scale generation in some technologies, for others it remained and for systems greater than 5MW, it was the only choice. The scheme worked by requiring electricity suppliers to prove provenance of renewable generation with purchase of certificates (ROCs) from renewable generators. The price of a single ROC was determined prior to each year, in an effort to stimulate the installation of renewable projects to meet Government targets. In recent times, the agriculture and horticulture sectors have popularised the install of renewable generators including PV and wind, which can get FiT and those such as Biomass CHP and Biomass Gasification, which attracted ROCs. With the demise of the ROC scheme, growers planning on a renewable electricity scheme will have two options in respect of incentives for electricity production: Feed-in Tariff (FiT) • – Pays a rate per kWh of gross electricity generation. Support on the FiT is limited to certain technologies: Solar PV, Wind, Anaerobic Digestion and Hydro systems and installations up to 5MW only. Where FiTs are available, rates have generally been more favourable than ROCs. Any surplus electricity can be sold to a supplier. The current scheme has capacity caps, i.e. a limited quantity can be accredited per quarter. Any applications beyond this capacity will be queued for the following quarter, where rates could be lower. Contracts for Difference (CFD) • – A contract between the generator and the Low Carbon Contracts Company (LCCC). It enables the generator to stabilise its revenues at the Strike Price (a pre-agreed level) for the duration of the contract. The idea is that the CFD payment will be the difference between the Strike Price and the market price for electricity. For example, if the Strike Price is agreed at £120/MWh and the market price achieved by the generator is £40/MWh, the CFD payment will be £80/MWh. If the market price is above the £120/MWh Strike Price, then the generator has to pay the difference. Importantly, the income for the generation of electricity from low carbon sources is guaranteed at a set rate, with less risk to the generator. The latest allocation round for CFDs was in April 2017 and covered the following technologies: Offshore Wind -- Advanced Conversion Technologies -- Anaerobic Digestion -- Biomass with CHP -- Wave -- Tidal Stream -- Geothermal -- Some technologies will not fit with either CFD or FiT. These projects will need to be appraised against value of electricity on the market and to the user. With reductions in cost of technologies and inexpensive fuel sources, a reasonable return on investment may still be possible. With the demise of the ROC scheme, growers planning on a renewable electricity scheme will have two options in respect of incentives for electricity production.