Memorandum by the Renewable Power Association
INTRODUCTION
The Renewable Power Association (RPA) is a newly
established trade association representing producers of renewable
energy. Its membership includes renewable electricity generators,
fuel suppliers and providers of heat, along with their equipment
and service providers.
The RPA has member companies involved in wind
energy, solar, biogas, energy-from-waste, landfill gas, biomass,
wave, tidal, marine current and sewage gas industries, together
with respected names from the legal, accounting, energy trading
and academic communities.
The RPA works on the large number of generic
issues that affect renewable energy producers, irrespective of
the technology involved. These include the New Electricity Trading
Arrangements, the Renewables Obligation, renewables integration
issues, embedded generation, NFFO/SRO contract issues, emissions
savings, planning, the Climate Change Levy, etc. Security of supply
and the contribution that renewable energy can play falls directly
within the remit of the Renewable Power Association.
This evidence is divided into two parts. The
first part summaries the general status of renewable energy in
the UK, and the second deals with the questions listed in Press
Notice No. 3 describing the enquiry, namely:
— Given the imminent dependence of
the UK on energy imports, how can the UK maintain a secure energy
supply? What mix of fuels would maximise security?
— Is there a conflict between achieving
security of supply and environmental policy? What is the role
for renewables, and Combined Heat and Power schemes?
— What scope is there for further energy
conservation?
— What impact would any changes have
on industrial competitiveness and on efforts to tackle fuel poverty?
— Is any change of Government policy
necessary? How could/should Government influence commercial decisions
in order to achieve a secure and diverse supply of energy?
PART 1
OVERVIEW OF
STATUS OF
RENEWABLE ENERGY
IN UK
Policy drivers for renewable energy.
Since 1990 renewable energy has been encouraged
by successive governments, primarily for its environmental benefits
but also for energy security issues.
The Conservative government introduced the NFFO
in 1990. The policy was to stimulate the development of new and
renewable energy sources wherever they have prospects of being
economically attractive and environmentally acceptable in order
to contribute to:
— diverse, secure and sustainable energy
supplies.
— the reduction in the emission of
pollutants and
— the encouragement of internationally
competitive industries.
The Labour government maintained most of the
momentum of the NFFO by having a fifth contract round (NFFO5),
whilst undergoing a review of renewable energy policy. This was
to be followed by NFFO5b for offshore wind and biomass, both of
which were not included in NFFO5. Regrettably this did not happen.
Labour's renewable energy policy for has five
key aims:
— to assist the UK to meet national
and international targets for the reduction of emissions including
greenhouse gasses;
— to help provide secure, diverse,
sustainable and competitive energy supplies;
— to stimulate the development of new
technologies necessary to provide the basis for continuing growth
or the contribution from renewables into the longer term;
— to assist the UK renewables industry
to become competitive in home and export markets and, in doing
so, provide employment;
— to make a contribution to rural development
(Preliminary consultation document, DTI, Oct 2000)
Thus it can be seen that renewables' contribution
to security of supply has been a consistent and key driver for
the promotion of renewable energy.
Renewable contribution to energy
There is much emphasis on renewable electricity
generation, although heat production is significant, particularly
the domestic and industrial consumption of wood. According to
the UK Digest of Energy Statistics almost 3,000 million tonnes
of oil equivalent was produced from renewable sources during 2000,
500 mtoe of which was wood. This data is summarised in Table 1,
to be found at the end of this response.
Government policy has focused almost exclusively
on promoting renewable electricity generation, and the NFFO has
been the main driver for the increasing contribution of renewables
to the UK energy mix.
Details of NFFO orders, along with their Scottish
and Northern Ireland counterparts are given in Tables 2-9 of this
evidence.
It should be noted that the NFFO (SRO &
Ni-NFFO) resulted in a dramatic fall in prices over a wide range
of technologies. However there has been a particularly poor commissioning
success rate for some technologies, notably wind energy and MSW.
Of the 3,600 MW dnc of capacity for which contracts
were awarded, only 930 had been commissioned as of the end of
March 2001. Difficulty in obtaining planning permission has been
a major barrier to renewables deployment. More information on
this subject can be found in the enclosed paper<mr100>.
Although no further NFFO orders will be made,
there is still a large amount of NFFO and SRO capacity left to
commission, and it is anticipated that NFFO projects will contribute
a significant amount towards the Renewables Obligation targets.
The Government intends to introduce secondary
legislation, which will allow NFFO (but not SRO) projects to relocate
without losing the benefit of the contract. This is expected imminently
and this is hoped to boost the prospects for the remaining uncommissioned
capacity.
As NFFO contracts insulate renewable projects
from the impact of the New Electricity Trading Arrangements (NETA),
this will be an attractive route for those projects where NFFO
price is competitive with developing a project under the Renewables
Obligation. It should be noted that it is not a simple comparison
between prices under the RO and NFFO. The longer contract term
and relative ease of financing projects with NFFO contracts (compared
to RO contracts) both have significant value in addition to the
protection from NETA.
The potential for renewables
Quantifying the RE resource is particularly
difficult, due to the large number of factors that can be taken
into account. The theoretical technical potential of renewables
is huge, but it is reduced when constraints on land use, cost
and network integration are taken into account. Market penetration
estimates attempt to take these constraints into account, but
there can be disagreement over the assumptions made.
The resource-cost data used in the March 1999
consultation paper<mr17> and R122 (the supporting annexes
on different technologies) suggest that 198.75 TWh of renewables
would be available at 5p/kWh at an 8 per cent discount rate. Over
three quarters of this is wind energy.
* Not printed.<mo17> New and Renewable
Energy: prospects for the 21st Century. DTI March 1999.
33.6 TWh are required under the RO to meet 10
per cent of sales from licensed electricity suppliers, and 38
TWh for 10 per cent of UK electricity supplies (the UK's target
under the EU Renewables Directive). This equates to some 5500-6,200
MW dnc of capacity (at 70 per cent load factor) respectively.
At a very basic level, the bids made into NFFO
gives an idea of the size of the potential resource—even
when set against declining prices. It can be seen that with each
successive order from NFFO3 onwards, the amount of capacity bid
in increased. Also it should be noted that energy crops and offshore
wind energy were excluded from entering NFFO5.
Table 10
| Order | Bids submitted MW dnc
| Contracts awarded (MW dnc) |
NFFO3 | 2464 (-670 of which wind)
| 653.9 |
| NFFO4 | 2556 (-875 wind) |
843.1 |
| NFFO5 | 2579 (-660 wind) |
1177 |
The first round of the offshore wind energy consenting process
has yielded a total of over 1600 MW of projects, and developers
are anxious to see further rounds initiated as soon as possible.
The above discussion indicates that the renewable resources
are large and the amount of resource is not a constraint on the
contribution that renewables can play in the UK energy mix.
INTERMITTENCY ISSUES
Contrary to popular opinion, the development of the intermittent
renewable energy sources, such as wind and wave poses no threat
to secure and stable supplies for the foreseeable future.
Coping with intermittent generation is not a technical problem
for the system. Up to 20 per cent of capacity can come from intermittent
sources without posing any problem to the National Grid Company
in its operation of the system. Above this level a small additional
amount of thermal plant may have to be kept part-loaded.
NETA has made intermittent generation a commercial problem,
to an extent not merited by the underlying economics of the electricity
supply system. To put this another way, renewables' commercial
difficulties under NETA have no technical basis.
BARRIERS TO
DEPLOYMENT
NETA
NETA is a significant problem for renewable electricity generation.
Ofgem's report of how small generators fared under the first two
months of NETA concluded that prices for renewable energy had
fallen (Ofgem suggests by around 25 per cent, but the RPA maintains
it is nearer 40 per cent when the Climate Change Levy exemption
is taken into account). This extra measure to help renewables,
worth up to £4.30/MWh, was overlooked in the Ofgem report
with the result that it was incorporated in basic energy price.
Therefore the price comparison with the previous year was not
comparing like with like.
Renewable plants are small and suffer disproportionately
because of their size. They do not have the resources to engage
in the complex NETA market, and to date the rules have acted as
a barrier to entry to consolidators.
The reasoning for renewables development is primarily environmental
and the impact on competitive markets is largely secondary. Even
if it were feasible it would not make environmental sense to operate
renewable plant to balance contract positions.
Several commentators are now questioning the efficacy of
NETA in the wider context and the extent to which NETA can be
credited with reducing electricity prices is questioned<mr18><mr19>.
It has already been observed that NETA has resulted in more
plant being run on a part-load. This tendency has come about because
the pricing rules systematically over-favours flexibility, and
generators are choosing to keep additional flexibility to increase
their output to avoid imbalances. Power UK estimates part loading
has risen from 1GW pre NETA to around 5GW (Power UK 88, June 2001
p 16) Part loading is less efficient and this trend has therefore
resulted in higher carbon dioxide emissions.
There are two approaches to remedying the situation; supporting
renewables through some other means—ie increasing the subsidy,
or by tackling the root cause of the problem and modifying NETA.
The RPA favours the latter approach.
There are a number of potential solutions to the problems
faced by renewable generators, and if the political will is there
to remedy the problem, the details can be worked out.
In conclusion, renewables costs have been artificially inflated
by NETA. This is particularly worrying in the context of the wide
ranging energy review running at present, as it plays into the
hands of those who argue that nuclear power is a cheaper option
for carbon saving.
PLANNING
Planning has already been touched upon as a key barrier
to the deployment of renewables. The background paper<mr101>
examines the planning picture with respect to NFFO projects and
clearly illustrates that securing planning permission has been
a grave hindrance to achieving government targets for renewable
energy.
<mo101> Not printed.<mo18>NETA—Is the
Glass Half Empty of Half Full? Nigel Cornwall. UK Powerfocus.
September 2001.<mo19>NETA—are there new risks? Power
UK 91.
The House of Lords report on renewable energy suggested that
"National policy for renewable energy needs to be a clear
and integral part of the planning guidelines. Moreover, planning
inspectors should be more clearly held accountable for decisions
by reference to those expanded guidelines"<mr119>.
The report also noted the value of regional targets for the implementation
of renewable energy.
Just over three years later, the regional assessment studies
are now nearing completion. The DTI has commissioned a further
study to bring the result together, to look at the differing assumptions
made across the studies and to examine the results in the context
of the Government's 10 per cent target for renewable energy. However
it is not within the remit of that further study to make recommendations
with respect to planning policy.
The real test of whether the "stakeholder buy-in"
approach used for the regional targets has been effective will
be seeing how the targets feed through to local planning authority
decisions and how quickly.
Recent debate within the renewable energy community has centred
on either updating Planning Policy Guidance note 22 (PPG22) or
a more radical approach such as that used for minerals aggregate
planning. Alternatively these two approaches could be pursued
simultaneously.
PPG22 on renewable energy was issued in 1993, but effectively
dates from 1991, when the first draft was issued for consultation.
Few amendments were made from the original draft. Government has
indicated that it will review PPG22 as soon as practicable<mr20>.
The RPA would be happy to draft or to co-ordinate the drafting
of this important document, as again, this is a cross-technology
issue.
Although very positive, the original PPG22 was not always
adhered to by planning committees and in itself did not create
a planning climate conducive to meeting the renewable energy targets
of the time. Nor would an updated and equally positive PPG22 be
a panacea. Planning inspectors often find it difficult to apply
checks and balances and resolve potentially conflicting guidance.
Reconciling national need with local considerations has proved
to be an obstacle. Government advice on balancing landscape and
renewable energy planning guidance would be helpful.
It has been suggested that a renewable energy planning regime
analogous to mineral local plans is a more robust and guaranteed
approach. Renewable energy shares much in common with minerals
aggregate in the planning context, in that targets are set at
a national level and broadly speaking the resource must be developed
where it occurs.
There was no clear consensus over which option (PPG22 revision
or local energy planning) was most desirable. Although latter
was thought by some to stand a greater chance of delivering the
targets, there were concerns over the length of time the process
would take. The RPA would like to see these issues debated more
fully and the scope for a simultaneous approach considered.
Also helpful would be a requirement that planning authorities
should ensure that a certain percentage (perhaps initially 10
per cent) of new buildings should incorporate renewable energy
generation within a defined proportion of the building envelope.
The RPA's members are deeply concerned about the planning
criteria and find the suggestions that developers should place
more emphasis on consultation with the local community unhelpful,
as the industry demonstrably spends considerable time and effort
on this. More support from the Government, whose targets the industry
is trying to deliver, would be helpful. This could take the form
of public information campaigns.
<mo119>Para. 12. Electricity from Renewables. Volume 1.
Select Committee on the European Communities. House of Lords.
Session 1998-99. 12th Report. HMSO. 29 June 1999.<mo20>
Ms Keeble in response to a parliamentary question from Mr Damian
Green. Hansard, 27 June 2001: Column: 103W.
EMBEDDED GENERATION
In January 2001 the joint DTI/Ofgem Working Group on Embedded
Generation reported its findings. Its two main recommendations
were:
(a) that Ofgem should review the structure of regulatory
incentives on Distribution Network operators (DNOs) in light of
their new statutory duty to facilitate competition, and
(b) to form a Committee to oversee the implementation
the Working Groups numerous detailed recommendations.
The DTI has invited nominations for representatives from
the various relevant sectors for this Embedded Generation Co-ordinating
Committee. The RPA nominated a renewable generator representative
and a domestic generator representative. The RPA's monthly meetings
would provide a forum whereby these representatives can report
on the work of the committee and solicit views from the membership
when required.
Ofgem published a preliminary consultation document in September,
the focus of which was to stimulate discussion on possible short-term
changes which could be implemented before the next distribution
price control to be introduced in April 2005. Proposals for consideration
within this timeframe include a move from deep to shallow(er)
connection charging, introduction of payment of generator distribution
use of system changes, improved information provision and metering
arrangements.
The adoption of renewable generation by the domestic sector
would be significantly enhanced if the connection process were
made more straightforward. If a type testing approach were taken
to domestic scale generation equipment to ensure that it passes
safety standards, and the installers of such equipment were certified
(eg in the manner of CORGI accreditation for gas engineers) then
this would do away with the need for individual connection agreements.
This approach was recommended by the Embedded Generation Working
Group.
Although keen to participate in this extremely important
work, the renewable generator community is severely hampered by
lack of resources to apply to this task, in comparison with those
available to DNOs.
PART 2
GIVEN THE
IMMINENT DEPENDENCE
OF THE
UK ON ENERGY
IMPORTS, HOW
CAN THE
UK MAINTAIN A
SECURE ENERGY
SUPPLY? WHAT
MIX OF
FUELS WOULD
MAXIMISE SECURITY?
Renewable energy sources offer the most secure of all energy
sources, inasmuch as the "fuel supplies" are indigenous.
With the exception of the landfill gas, which will slowly reduce
in the longer term as less biodegradable material is landfilled,
these supplies are inexhaustible.
Any fuels that are imported or transported will be subject
to such potential supply crises, even in the context of sufficient
resource being available. The majority of renewable energy sources
deliver themselves to the power plant, and no amount of human
intervention could stop them! This, coupled with their diverse
nature, reduces two elements of energy security risk.
Energy security is not just an issue of fuel distribution
and geo-politics. Problems with infrastructure and distribution
can occur within the UK. Having road tankers deliver fuel to service
stations is not a secure energy supply, as was demonstrated in
September 2000 when the whole country was brought to standstill
by a small group of protestors. Renewable (or fossil) natural
gas can be delivered to service stations using the existing national
Natural Gas grid in a much more secure manner. It is also a much
more environmentally friendly distribution system.
The recent events in the US have demonstrated the potential
risk that terrorism can play. Large scale nuclear power plants
pose a particular security of supply risk in this context. Nuclear
power plants have the added dimension of potential for radiation
release as a consequence of such attacks. In contrast, the characteristics
of renewable plant; their small size, geographically dispersed
nature, the fact that they are embedded within the distribution
network and have minimal infrastructure to act as a possible target
make them particularly attractive.
As covered earlier, the UK has substantial resources of most
of the renewable energy types, and mostly at prices which are
on a par with, or only slightly higher than, the generation costs
from gas, given the recent price rises. There is also much scope
for increasing renewables' contribution to heat production and
transport fuels.
The renewable energy sources also offer stable electricity
prices as they are insulated from fuel price changes. As these
sources are capital-intensive, price levels are largely fixed
at the completion of construction phase. Most renewable sources
are small-scale and construction times are short, so cost and
time overruns are rare.
Beyond noting that the contribution of renewable energy should
be as high as possible, speculating on components of the fuel
mix is an issue outside the remit of the RPA.
IS THERE
A CONFLICT
BETWEEN ACHIEVING
SECURITY OF
SUPPLY AND
ENVIRONMENTAL POLICY?
WHAT IS
THE ROLE
FOR RENEWABLES
AND COMBINED
HEAT AND
POWER SCHEMES?
Renewables have zero or low greenhouse gas emissions, as
well as being the most secure forms of energy supply. Therefore,
far from causing a conflict between environmental objectives and
security of energy supply, renewable energy is complimentary to
both.
The example of Denmark shows that can be done with progressive
and long-term policies to encourage the development of renewable
energy sources. The Danish Government has an Energy Plan that
extends to 2030, and covers all sectors. Greenhouse gas emissions
are steadily being reduced as a consequence. The Plan envisages
30 per cent of primary energy—and 50 per cent of electricity—coming
from renewables by 2030 and the changes in the fuel mix up to
that time have been projected. This gives all sectors of the renewable
industry a long-term basis on which to plan.
WHAT SCOPE
IS THERE
FOR FURTHER
ENERGY CONSERVATION?
Although this is beyond the remit of the RPA, it is noted
that there are further and substantial opportunities for energy
conservation measures across the board—in industry, commerce
and the domestic sector.
However, trends today to show that energy consumption is
increasing, even though the stock of energy consuming equipment
is becoming increasingly energy efficient. The growth rate in
total electricity supply between 1996 and 2000 averaged around
1.2 per cent between 1980 and 2000 it averaged 1.7 per cent. The
National Grid Company anticipates growth averaging 1.4 per cent
per annum over the next seven years<mr219>. The policy of
striving for lower prices to the consumer only encourages this.
WHAT IMPACT
WILL ANY
CHANGES HAVE
ON INDUSTRIAL
COMPETITIVENESS AND
ON EFFORTS
TO TACKLE
FUEL POVERTY?
The incremental costs of developing renewable energy sources
are mostly very small. It should be noted that the new Renewables
Obligation gives a false picture here, as the Government has assumed
that the price of all renewables will tend towards the "buyout"
price.
It should be noted that the whole rationale for development
of renewables rests on the need to avoid the much higher costs
likely to be incurred from the "External costs" of the
fossil fuels, particularly global warming.
Efforts to tackle fuel poverty should continue and there
would appear to be scope for absorbing the extra costs of renewables
by cutting back the overall profit margin within the electricity
supply industry.
<mo219> Table 2.1—ACS Peak Demand and Annual Electricity
Requirements Forecasts. National Grid Company Seven Year Statement,
2001.
IS ANY
CHANGE OF
GOVERNMENT POLICY
NECESSARY? HOW
COULD/SHOULD
GOVERNMENT INFLUENCE
COMMERCIAL DECISIONS
IN ORDER
TO BE
ACHIEVED A
SECURE AND
DIVERSE SUPPLY
OF ENERGY?
The final responses to the Government's consultation on the
Renewables Obligation were accepted just over two weeks ago. The
Association made a series of suggestions as to how the policy
could be improved, and a copy of the RPA's response to the consultation
is enclosed with this evidence<mr102>.
In summary the RPA makes the following points in its response:
1. The Government should undertake a formal review (within
two to three years of the Order being made) to evaluate the progress
towards the targets and reconsider if necessary the sufficiency
of the buy-out price, the sources of renewable energy supported
by the obligation and any reasons why certain technologies may
not be forthcoming.
2. Delays in implementing RO should be avoided.
3. The Order should be drafted to avoid the potential
for renewable energy sites to be sterilised.
4. Autogeneration and licence exempt supply from renewable
sources should be eligible for ROCs.
5. The two per cent allowance for fossil contamination
of biomass should be raised to 10 per cent (by weight).
6. "Good quality" energy from waste projects
should be eligible for ROCs.
7. The definitions of gasification and pyrolysis should
remain broad in order to avoid stifling innovation in these developing
technologies.
8. Fossil fuel use in a minimal fossil use generating
station should not be defined.
9. The RO targets should be raised to cover additional
ROCs likely to come from refurbished hydro schemes.
10. Refurbished hydro stations that were above 20 MW
prior to refurbishment, but reduced during refurbishment to below
20 MW should not be eligible for ROCs.
11. Micro-hydro schemes at industrial sites should be
encouraged.
12. All micro-hydro projects should be eligible for ROCs
irrespective of the history of their ownership.
13. Ensure that demand for RE continues to grow beyond
2010. (Retaining a limit of 10.4 per cent post 2011 may reduce
the value of ROCs and curtail debt terms.)
14. Reinforce the intention not to remove any qualifying
RE sources from the RO, whilst keeping open option to add new
sources.
15. Confirm the intention that any amendment to the RO
will enhance the UK RE industry and that nothing will be done
that adversely affects the credit quality of PPAs (ie as per NFPA
assurances on NFFO contracts).
<mo102> Not printed.
16. Member States' obligations should be similar enough
not to cause distortions to the UK market.
17. Integrate the current diverse sources of capital
grant funding into a coherent programme aimed at subsidising capital
intensive projects.
Further suggestions
Introduce Rural Development Certificates as a way of recognising
that biomass contributes significantly to the rural economy as
well as producing environmental benefits.
Ensure that successful projects are not reliant on a number
of financing sources, all of which need to be in place before
projects come to fruition. The RPA welcomes the news that New
Opportunities Funds will be made available together with DTI grant
awards for offshore wind and biomass. It is preferred that such
sources of funds are consolidated at Government level.
OTHER MAJOR
AREAS OF
GOVERNMENT POLICY
The key barriers identified earlier need to be addressed.
The most pressing short-term need is for Government to encourage
or promote make a small amendment to the New Electricity Trading
Arrangements to exempt renewable generators from the unfair penalties
they currently suffer in the balancing market. These penalties
are not cost reflective—the intermittent renewable sources
incur no extra costs to the system operator.
Also in the short term, the Government needs to take a firm
grip on planning, where delays and anomalies still abound.
The detailed recommendations of the working group on embedded
generation should be implemented. Government support to the industry
may be necessary in order to enable it to devote sufficient resources
to this key work.
Table 1
| Electricity generation (mtoe)
| Heat production (mtoe) | Total
|
| | |
|
| Active solar heating | —
| 10.5 | 10.5 |
| Onshore wind | 81.3 | —
| 81.3 |
| Small scale hydro | 20.5 |
— | 20.5 |
| Large scale hydro | 418.6 |
— | 418.6 |
| Landfill gas | 717.6 | 13.6
| 731.2 |
| Sewage sludge digestion | 120.2
| 41.1 | 161.3 |
| Wood (domestic and industrial) | —
| 502.8 | 502.8 |
| Straw | — | 71.7
| 71.7 |
| MSW combustion | 559.8 |
76.4 | 636.2 |
| Other | 313.9 (eg tyres, farm waste, poultry litter etc)
| 48 (tyres, clinical waste, industrial waste and farm waste)
| 361.9 |
| Total biofuels | 1,667.7 |
735.5 | 1,759.5 |
| Geothermal aquifers | |
0.8 | 0.8 |
| | |
|
| | |
|
| Total | 2,232
| 764 | 2,996.9
|
Source: Table 7.6 UK DUKES. Renewable Sources used
to generate electricity and heat. Data for 2000.
DETAILS OF
NFFO AND SRO RENEWABLES
ORDERS
The following tables list the technologies supported, the
capacity contracted and prices in pence/kilowatt-hour in money
of the day.
Table 2
NFFO1 CONTRACTS (1990)
| Technology | Projects
| Capacity (MW dnc) | Lowest bid price
| Highest bid price contracted | Commissioned projects (MW dnc)
|
| Wind | 9 | 12.2
| 5.57 | 10.00 | 7
| (11.6) |
| Hydro | 26 | 11.9
| 3.85 | 7.50 | 21
| (10) |
| LFG | 25 | 35.5
| 3.60 | 6.40 | 10
| (30.8) |
| MSW | 4 | 40.6
| 5.06 | 6.00 | 4
| (40.6) |
| Other (waste) | 4 | 45.5
| 4.43 | 6.00 | 4
| (45.5) |
| SG | 7 | 6.5 |
4.40 | 6.00 | 6 |
(6) |
| Total | 75 | 152.1
| 5.5 overall average price | 61
| (144.5) |
Contracts for NFFO1 and NFFO2 expire at the end of December
1998. Projects were paid their bid price.
Table 3
NFFO2 CONTRACTS (1991)
| Technology | Projects
| Capacity (MW dnc) | Lowest bid price
| Average | Band strike price
| Commissioned projects (MW dnc)
|
| Wind | 49 | 84.4
| 6.39 | 9.97 | 11.00
| 24 | (52.5) |
| Hydro | 12 | 10.9
| 3.40 | 5.06 | 6.00
| 10 | (10.4) |
| LFG | 28 | 48.5
| 3.96 | 4.75 | 5.70
| 26 | (46.4) |
| MSW | 10 | 271.5
| 5.50 | 6.20 | 6.60
| 2 | (31.5) |
| Other (waste) | 4 | 30.2
| 4.00 | 5.42 | 5.90
| 1 | (12.5) |
| SG | 19 | 26.9
| 4.80 | 5.16 | 5.90
| 18 | (19.8) |
| Total | 122 | 472.2
| overall average price | 7.20
| 81 | (172.4) |
Contracts for NFFO2 end on 31 December 1998. Projects were
paid the "strike price"—the highest contracted
price in their technology band.
Table 4
NFFO3 CONTRACTS (1994)
| Technology | Projects
| Capacity (MW dnc) | Lowest bid price
| Average | Highest bid price
| Commissioned projects (MW dnc)
|
| Wind>1.6 MW dnc | 31 | 145.99
| 3.98 | 4.43 | 4.8
| All wind |
| Wind<1.6 MW dnc
| 24 | 19.7 | 4.4
| 5.2 | 5.9 | 19
| (46.3) |
| Hydro | 15 | 41.48
| 4.25 | 4.46 | 4.85
| 8 | (11.7) |
| LGF | 42 | 82.07
| 3.29 | 3.76 | 4.00
| 42 | (82.1) |
| MSW | 20 | 241.87
| 3.48 | 3.89 | 4.00
| 6 | (77.4) |
Energy crops
(gasification) | 3
| 19 | 8.4 | 8.6
| 8.7 | All E. crops
|
Energy crops
(residual) | 6
| 103.8 | 4.9 | 5.0
| 5.2 | 3 | (77.5)
|
| Other | | |
| | |
| |
| Total | 141 | 653.9
| Weighted average price 4.3 p/kWh
| 78 | (295.0) |
Contracts are for a 15-year peroid. Projects are paid their
bid price (index linked). This is also the basis of NFFO4 and
5 contracts.
Table 5
NFFO4 CONTRACTS (1997)
| Technology | Projects
| Capacity (MW dnc) | Lowest bid price
| Average | Highest bid price
| Commissioned projects (MW dnc)
|
| Wind>0.768 MW dnc | `48 |
330.4 | 3.11 | 3.53
| 3.80 | All wind |
| Wind<0.768 MW dnc
| 17 | 10.4 | 4.09
| 4.57 | 4.95 | 4
| (4.5) |
| Hydro | 31 | 13.3
| 3.80 | 4.25 | 4.40
| 7 | (2.1) |
| LGF | 70 | 173.7
| 2.80 | 3.01 | 3.20
| 51 | (135.7) |
| MSW | 6 | 126
| 2.66 | 2.75 | 2.80
| All MSW |
| MSW with CHP | 10 | 115.3
| 2.79 | 3.23 | 3.40
| 2 | (15) |
Biomass gasification
or pyrolysis |
7 | 67.4 | 5.49 |
5.51 | 5.79 | |
0 |
AD of agricultural
wastes | 6
| 6.6 | 5.10 | 5.20
| 5.17 | | 0 |
| Total | 195 | 843.1
| Weighted average price 3.46p/kWh
| | 64 |
| (157.3) | | |
| | |
| |
Table 6
NFFO5 CONTRACTS (1998)
| Technology | Projects
| Capacity (MW dnc) | Lowest bid price
| Average | Highest bid price contracted
| Commissioned projects (MW dnc)
|
| MSW with CHP | 7 | 70
| 2.34 | 2.63 | 2.9
| | |
| MSW | 22 | 416
| 2.39 | 2.43 | 2.49
| | |
| Hydro | 22 | 9
| 3.85 | 4.08 | 4.35
| | |
| LFG | 141 | 314
| 2.59 | 2.73 | 2.9
| 35 | (71.6) |
| Wind>0.995 MW dnc | 33 |
340 | 2.43 | 2.88
| 3.1 | All wind |
| Wind<0.995 MW dnc
| 36 | 28 | 3.4
| 4.18 | 4.6 | 2
| (1.7) |
| Total | 261 | 1,177
| weighted average price 2.71 p/kWh
| 37 | (73.3) |
Table 7
SRO1 CONTRACTS (1994)
| Technology | Projects
| Capacity (MW dnc) | Lowest bid price
| Average | Highest bid price contracted
| Commissioned projects (MW dnc)
|
| Wind | 12 | 45.6
| 3.79 | 4.17 | 3.99
| 7 | (25.1) |
| Hydro | 15 | 17.3
| 3.42 | 4.15 | 3.94
| 6 | (4) |
| LGF | 2 | 3.8 |
4.08 | 4.10 | 4.09
| 2 | (3.8) |
| Biomass | 1 | 9.8
| 5.08 | 5.08 | 5.08
| 1 | (9.8) |
| Total | 30 | 76.5
| Weighted average price 4.31 p/kWh
| 16 | (42.7) |
Table 8
SRO2 CONTRACTS (1997)
| Technology | Projects
| Capacity (MW dnc) | Lowest bid price
| Average | Highest bid price contracted
| Commissioned projects (MW dnc)
|
| Wind | 7 | 43.6
| 2.74 | 2.86 | 2.94
| | |
| Hydro | 9 | 12.3
| 3.45 | 3.64 | 3.76
| 1 | (0.8) |
| Waste | 9 | 56.1
| 2.7 | 3.04 | 3.20
| 3
1
| (6.7) lfg (83.3)MSW
|
| Biomass | 1 | 2
| 6.88 | 6.88 | 6.88
| | |
| Total | 26 | 114
| Weighted average price 3.11 p/kWh
| 5 | (15.8) |
Table 9
SRO3 CONTRACTS (1999)
| SRO3 | Projects
| Capacity (MW dnc) | Highest bid price contracted
| Commissioned projects (MW dnc)
|
| Biomass | 1 | 12.9
| not disclosed | |
|
| Hydro | 5 | 3.9
| 3.59 | | |
| MSW & LGF | 16 | 48.21
| 3.14 | 1 | (3.9)
|
| Wave | 3 | 2 |
7 | 1 | (0.2 |
| Wind | 11 | 63.43
| 2.19 | All wind |
| Wind small | 17 | 12.26
| 3.38 | 4 | (10.8)
|
| Total | 53 | 142.7
| | 6 | (14.9)
|
| 
