energy prices explained: what are feed-in tariffs and the renewables obligation?
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Find out how sustainable energy policies such as feed-in tariffs and the renewable obligation are affecting business electric prices.TRANSCRIPT
Energy Prices Explained: What is Feed-in tariff and Renewables Obligation?Ever wondered how sustainable energy policies affect business electricity prices? Find out here.
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Price
What is the Feed-in Tariff?The Feed-in tariff (FiT) is a charge on your electricity bill designed to support
renewable energy production.
What is the Feed-in Tariff?The Feed-in tariff (FiT) is a charge on your electricity bill designed to support
renewable energy production.
Introduced: 1 April 2010Administered by: OFGEMWho gets the money: Small-scale renewable generators, such as a factory with solar panels or a small wind turbine, with less than 5MW declared net capacity.Who pays the money: Suppliers make the payments to each generator, but the full cost is borne by business users, via a FiT charge on their electricity bill.
What is the Renewables Obligation?Renewable Obligations (ROs) force electricity suppliers to increase the
proportion of renewable-sourced energy that they buy for their consumers.
What is the Renewables Obligation?Renewable Obligations (ROs) force electricity suppliers to increase the
proportion of renewable-sourced energy that they buy for their consumers.
Introduced: 2002Administered by: OFGEMWho gets the money: • Accredited renewable energy generators are
issued Renewable Obligation Certificates (ROCs).• They sell these to electricity suppliers along with
their output.• The electricity suppliers redeem them to prove
that they have met their RO targets.Who pays the money: Business users, within their unit rates on their electricity bill.
Why were they set up?The Feed-in Tariff is designed to encourage households, communities, and businesses
to generate their own electricity on-site, reducing the need to purchase it from a supplier. In many cases, they may even sell excess power back to the grid.
Why were they set up?The Feed-in Tariff is designed to encourage households, communities, and businesses
to generate their own electricity on-site, reducing the need to purchase it from a supplier. In many cases, they may even sell excess power back to the grid.
Renewable installations registered under the FiT as of 30 June 2013:
398,509
Why were they set up?The Feed-in Tariff is designed to encourage households, communities, and businesses
to generate their own electricity on-site, reducing the need to purchase it from a supplier. In many cases, they may even sell excess power back to the grid.
Renewable installations registered under the FiT as of 30 June 2013:
Total installed capacity registered under the FiT as of 30 June 2013:
398,509 1,919 MW
Why were they set up?Technologies that qualify for FiT funding:
Solar electricity (PV) (roof mounted or stand alone)
HydroelectricityWind turbines (building mounted or freestanding)
Why were they set up?Technologies that qualify for FiT funding:
Solar electricity (PV) (roof mounted or stand alone)
HydroelectricityWind turbines (building mounted or freestanding)
Anaerobic digesters Micro combined heat and power (CHP)
Why were they set up?While FiT encourages small-scale renewable energy production, the Renewables
Obligation incentivises large-scale renewable electricity generation in the UK.
ROCs issued in 2011-12: 34.8 million
Why were they set up?While FiT encourages small-scale renewable energy production, the Renewables
Obligation incentivises large-scale renewable electricity generation in the UK.
ROCs issued in 2011-12:
Renewable generation covered by RO:
34.8 million31.0 TWh
Why were they set up?While FiT encourages small-scale renewable energy production, the Renewables
Obligation incentivises large-scale renewable electricity generation in the UK.
ROCs issued in 2011-12:
Renewable generation covered by RO:
Increase over renewable generation covered in 2010:
34.8 million31.0 TWh
34%
Why were they set up?While FiT encourages small-scale renewable energy production, the Renewables
Obligation incentivises large-scale renewable electricity generation in the UK.
ROCs issued in 2011-12:
Renewable generation covered by RO:
Increase over renewable generation covered in 2010:
Percentage of energy in UK now coming from renewables under RO:
34.8 million31.0 TWh
34%10%
How does the FiT affect the price I pay for my electricity?
How does the FiT affect the price I pay for my electricity?
Percentage of average electricity bill taken up by FiT in 2013:
3%
How does the FiT affect the price I pay for my electricity?
Percentage of average electricity bill taken up by FiT in 2013:
Total FiT payments due to generators for the quarter 1 April to 30 June 2013:
3% £166 million
How does the FiT affect the price I pay for my electricity?
Most of the payments go to help people who have installed solar energy.
Solar PV as a percentage of installed
renewable capacity:
88%
1 April to 30 June 2013
How does the FiT affect the price I pay for my electricity?
Most of the payments go to help people who have installed solar energy.
Solar PV as a percentage of installed
renewable capacity:
88%
Wind as a percentage of installed renewable capacity:
8%
1 April to 30 June 2013
How does the Renewable Obligation affect the price I pay for my electricity?The Renewable Obligation support cost will increase each year towards 2020,
as the government continues to increase the amount of renewable energy produced in the UK.
How does the Renewable Obligation affect the price I pay for my electricity?The Renewable Obligation support cost will increase each year towards 2020,
as the government continues to increase the amount of renewable energy produced in the UK.
Percentage of average electricity bill taken up by RO changes in 2013:
8%
How does the Renewable Obligation affect the price I pay for my electricity?The Renewable Obligation support cost will increase each year towards 2020,
as the government continues to increase the amount of renewable energy produced in the UK.
Combined with other energy policies in 2013, RO and FiT are estimated to be adding around 15-21% to the average
energy bill of a medium-sized company.
Percentage of average electricity bill taken up by RO changes in 2013:
8%
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