Posted on 19 December 2013 by Priyanka Shrestha
There have been mixed reactions from renewable trade bodies on the Government’s plan to reform the electricity market.
DECC today published its revised decision on strike prices for renewable generators in the Electricity Market Reform (EMR) Delivery Plan following consultation on the draft plan published in July.
It confirms the lower levels of strike prices for onshore wind issued earlier this month but said the Government could introduce auctions for more established low carbon technologies when the Contract for Difference (CfD) regime is introduced.
Onshore wind is expected to be part of the process, which RenewableUK believes “adds more risk” for the renewable source.
Maf Smith, Deputy Chief Executive of RenewableUK said: “There are already substantial cuts planned for onshore wind support and plunging onshore wind into an auction process adds more risk and could be severely detrimental.
“Auctions being introduced at the start of the regime (in 2014) risks sending shock waves through the industry – we’re talking about projects that will have been developed years previously, with substantial money having been invested in bringing them to consent. The energy market is exceedingly sensitive to any decisions which don’t look to be based on robust policy and this could have an impact on all forms of much-needed energy investment”.
The Renewable Energy Association (REA) however welcomed the Government’s Plan and the auction-based CfDs, which it believes could accelerate the cost reductions of some technologies.
Chief Executive Dr Nina Skorupska said: “Clarity on the terms of the contracts is very helpful for project developers and investors. It is encouraging to see many of the pieces falling into place. The transition to auctions acknowledges and could accelerate the cost reductions of the more established technologies, which is good news for industry and rate payers alike.”
The REA is calling on the Government to ensure the EMR helps independent generators access the energy market, delivers a “fair, efficient and transparent contract allocation process” and designs contract management and metering procedures so all kinds of technologies are able to access CfDs.