At the outset Alan Knight reminded us what a successful piece of policy the feed-in-tariff (FIT) has been worldwide – operating in 50 countries. And we were honoured to welcome Hans-Josef Fell, the architect of the feed-in-tariff scheme in Germany to fill us in on the reasons why. After arriving a little late negotiating the intricacies of black cab etiquette in the middle of a tube strike and armed only with Euros, Hans-Josef made a very compelling case for the FIT as a policy instrument. He first underlined the three important principles that underlie a successful FiT policy: A guaranteed excess, Different tariffs for different technologies and a secure and long term. He also stressed the wealth creation that FIT had created in Germany – creating a further 270,000 jobs and a £7bn industry in the process. Initially the scheme was fought against bitterly by the liberals and conservatives for more than six years – and when they got to power they voted it in. Hans-Josef stressed throughout that this was affordable - £2 a month wasn’t that much to ask households; a beer a month. And set against the subsidies enjoyed by oil, gas and nuclear it did not compare. He cited a recent study from Stanford by Jacobson and Delucchi that concluded the world could move to 100% renewables for $100 trillion in 20 years. Which would be half the cost in subsidies afforded to the fossil fuel derived energy providers. This is fairly compelling stuff.
This policy background was a great backdrop to our discussion. But Richard Tarboton of BT and Brendan Fogarty of SEGRO helped provide us with the corporate nitty-gritty.
Richard explained where FIT fits in at BT. Their three prong low carbon plan is to increase energy efficiency, build more renewable capacity and source more low carbon and renewable energy. With a quick aside to policy makers that much more work is needed on the green energy audit trail, Richard explained how FITs would impact their renewables capacity. The FIT means their successful and continued use of wind (historically the more compelling proposition with its 20% - 30% yield) continues – and sites producing less than 5MW fit in to the FIT scheme. But this would now be supported by a good deal of PV installation on the 6,200 plus sites available for sticking panels up. PV is a far more capital intensive technology with an 8-12% yield in the UK, but the FIT and easier planning processes make it a much more attractive option.
Brendan’s main question for the audience (and the market) was how much of an added differentiator does solar provide to would be tenants. He also highlighted the problems for property companies in putting up installations on properties that have 25 year leases. Who owns the roof space, the structural integrity of buildings and their roofs and warrantees being three of a number of major niggles that make large scale progress on PV very difficult. SEGRO had been approached by investors and were keen to go down a rental route, but gauging the quality of partners in such a new industry was one more big head ache – who do you trust and who has the niche expertise? If it rents a building quicker now then let’s move ahead straight away. And if that shows a general belief in the direction of travel then so much the better.
The questions covered 4 themes: planning, suppliers, CRC and the other renewables. Hans-Josef explained that German planning laws allowed for all installations outside protected areas unless the installation posed an environmental risk. And Brendan went on to observe that planners were likely to exercise more leniency with PV than other technologies.
On the suppliers and the chance to build a PV industry on the back of the scheme all speakers agreed that the opportunity to build a PV manufacturing industry had gone, although there would be a big installation opportunity. And some hybrids that would help oversee all elements. The CRC did mean you couldn’t double count projects, but that was the idea of the policy – energy efficiency was its aim and it was doing a job there. On the subject of renewables other than wind or PV being used under the scheme – there were opportunities, but PV and wind were the leading technologies. You just have to assess your
A write up of the table discussion that followed will be with us shortly. One thing that was touched on there was the opportunity to create renewables solutions for households. The German market had not really done that due the aggregated nature of its big businesses – utilities wanted no part in it and the retailers and other brands had strong links with these utilities. So UK plans from companies like Tesco, M&S and British Gas to provide consumers with one stop solutions is a good example of how we can take the scheme to places it did not go in Germany. Finance is key – and that is the theme for our energy efficiency session on 11th October.
Copyright © Green Business Events. All rights reserved.