Energy Prices Explained: What are Feed-in Tariffs and the Renewables Obligation?

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Information about Energy Prices Explained: What are Feed-in Tariffs and the Renewables...
Business & Mgmt

Published on March 14, 2014

Author: ENERGplc

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Find out how sustainable energy policies such as feed-in tariffs and the renewable obligation are affecting business electric prices.

Energy Prices Explained: What is Feed-in tariff and Renewables Obligation? Ever wondered how sustainable energy policies affect business electricity prices? Find out here. www.energ.co.uk/procurement 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 2010 Administered by: OFGEM Who 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: 2002 Administered by: OFGEM Who 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 million 31.0 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 million 31.0 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 million 31.0 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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