How Do We Get New Unsubsidised Renewables On the System?

This is a bit of a topic. I will be intrigued to see if it gets any interest.

For the last 20 years or so we have had a simple system of getting new renewable generation onto the electricity network. It has been offered some sort of state support. This means that the extra funding per kWh it has needed in the past is made up by some sort of extra payment either directly by government or more recently (more than the last 10 years) by a government determined system that puts the extra onto our electricity bills. The extra being the difference between the whoelsale price and the price the renewables need to work. This latest approach has now been stopped and various discussions are going on about what to if anything to do next.

What is interesting though is that recent large scale solar tenders in the middle east have got the price of solar electricity for a large scale a long term contract down to around 2p / kWh. Further a recent deal in Australia saw wind power down to around 5p/kWh. These cases are both for very large scale projects (on a peak basis roughly 4,000 to 12,000 houses worth) with long term contracts (20 years). So my question is really what exactly by way of support do we still need if any and how can compnanies like Bulb who buy renewables but probably from the pool of supported projects support new projects at the scale that is realisitic for a company of this size but at a price that is attractive enough to keep us all as customers? Further how do we match the huge variablity in demand (thats us) with the seasonal and daily variability of the generation (thats the sun wind and rain)? I guess that is three questions but I hope that encapsulates the main points.

Does anyone have any ideas?

@math_cabadaich great topic opener. I’ve got a couple points to throw into the mix (I’ll try and keep it short!)

Firstly, though ROCs have now ended for renewables, CFDs are taking the forefront of renewable subsidies. As it stands only newly emerging technologies are eligible for these. “Mature” tech like wind and solar aren’t included, and as a result, the renewables industry is lobbying for a clearer mechanism to support these kinds of generation. Energy UK are stirring up some great ideas here-

There are a couple differences worth bearing in mind when comparing wind and solar in the UK to other parts of the world.
Though the UK has fantastic blustery conditions for wind, it’s not in the highest scoring countries for solar. It’s not to say we don’t have good conditions, just that it involves a bit more logistics to get it working as easily as in the Outback.

There are a couple big blockers which are preventing us reaching those 2 penny figures. One of which is a minimum price to buy panels. This means that we can’t buy panels at the same low price as outside of Europe. This looks like it’s going within the next few years, which will result in a hefty price drop overnight!

Another blocker on both wind and solar is planning permission. Showing support for projects means there’s a better chance that they’ll get the vital yes from the local council and make it from paper to field.

In general, the more support that is shown for renewables, the more likely it is that new policies will be created which favour the technology. Whether that be for dropping component prices, helping planning approval or finding new routes of financial support. A super easy way to show this support is to turn green the energy you use :slight_smile: If we keep on switching to renewable plans, the government is sure to get the message!

As the wind and solar mix increases, we’ll become smarter in the way we store and reserve energy supplies. Battery storage is coming down in price and demand side management is helping the industry make the most of the energy generated at peak times. Unlike the majority of fossil fuels, renewable generators are quick off the start line to turn on and off, so are far more flexible than often given credit.

What do you think? Any ideas for the next steps for the UK renewable journey?

@helen that’s some really interesting info, thanks. I’m particularly interested in understanding ways in which we can raise solar energy adoption - I’d appreciate your comments on my blogs at
I knew CFDs were replacing ROCs this year, but I didn’t realise CFDs only apply to emerging technologies and not Solar PV!
So if we wanted to develop a fully certified on-grid solar farm in order to sell renewable energy to retailers like Bulb (via PPAs), what scheme, if any, is now available for that?

It appears CFDs do indeed apply to solar?

@rishi227 - solar and small scale wind were both included in the first round of CfDs. They’ve since been removed as the government figured that they’re now in a good place to start operating without subsidies. Instead, they want to focus the limited budget on new technologies that need a little more support.

For solar, there is still a small level of subsidy available through the Feed In Tariff. This is nowhere near as high as it used to be but it can certainly lend a helping hand. Some of the larger scale projects are even starting to be able to hit those green project lights without the help of subsidies. The really important thing to focus on if you’re looking to develop farms is to get close to a grid station with capacity. This can really make or break the project.

On the windier end of the spectrum, it’s exciting to hear that the first wind farms are also starting to be pledged to be built without subsidies.

Thanks for sharing your site, it’s awesome to hear what you’re doing! I’ll have a flick through the blog and see if I can add anything.

as simply a bulb customer because of losing trust in the big 6 and liking the idea of going green while getting a good deal (Money Saving Expert deal got me to join) I’m wondering what ROCs and CFDs are ? I’m glad that Feed in Tariff was spelled out as i’ve seen FIT elsewhere and wondered what it meant …. I’m glad to find this kind of discussion on here but i’d like to see more plain english rather than jargon

@swannyp hope this helps – but let me know if we should flesh anything out or clarify anything.

Renewables Obligation Certificates (ROCs) and Contracts for Difference (CfD) are both policies to support new low carbon initiatives.

ROCs were subsidies (in £ per MWh) paid to low-carbon generators.

New projects do not get ROCs, though – they get Contracts for Difference, CfDs set a fixed (high) price per kWh for the power that new low-carbon projects generate.

To be thorough, there’s one other important renewable energy subsidy: Renewable Energy Guarantees of Origin (REGOs) are certificates whose price depends on supply and demand for them. Each MWh that renewable generators produce entitles them to a REGO which they can then sell.

It’s a really interesting topic.

We have recently seen a massive reduction in subsidies provided to UK Offshore Wind and Solar - the 2nd CfD for some offshore wind farms ended up with £57.50/MWh which is very close to market price (as Helen pointed out there are already subsidy free offshore wind being built elsewhere in EU); and also the first solar farm without any subsidy. So the costs of renewable are coming down (more renewable also drives down wholesale prices as they have 0 fuel cost).

However, to counteract the imminent effect of renewable generation, we need to use energy more smartly and at the right times - this is where demand side response and battery kick in, which will ensure we can still keep our lights on when wind isn’t blowing and sun isn’t shining!