Solar ... In the news

Delia_Cardei

China, in a pact with US President Barack Obama, agreed in November to get 20 per cent of its energy from renewable sources by 2030, with its total carbon emissions peaking the same year. To reach that goal, the Chinese government earlier this year boosted its target for 2015 solar installations to 17.8 gigawatts from about 12 gigawatts.

Another factor, for the sake of cutting carbon emission.

Martyn1981

warrenb wrote: »

So it looks like FiT for roof installs is safe for now. Having a look at the FiT consultation paper on the DECC website, they wish to remove pre-accreditation for systems of 50kw or less.

I've been reading the news and the consultation paper. I'm reading that pre-accreditation relates to registering a system prior to it being fully signed off.

In the case of domestic installs that doesn't seem to matter since you can't register till you have all the paperwork confirming the install is complete.

Can someone explain/confirm the situation?

Mart.

Martyn1981

Delia_Cardei wrote: »

Another factor, for the sake of cutting carbon emission.

India is also scaling up its solar plans at a very rapid rate:

India solar power investment could surpass coal by 2019-20 – Deutsche Bank

Investment in solar power in India could surpass investment in coal by 2019-20, with US$35 billion already committed by global players, according to a Deutsche Bank report.

The report ‘India 2020: Utilities & renewables’ said the focus on solar would be driven by prime minister Narendra Modi’s ambitious target of deploying 100GW of solar capacity in the country by 2022.

The report stated: “Private sector interest is decisively moving towards solar from coal power, and we foresee numerous opportunities of fund-raising, yieldco structuring and M&A activity.”

Furthermore, Deutsche Bank raised its forecasts for solar capacity additions to 34GW by 2020, up 240% from its previous 14GW projection. Therefore, by 2020 annual solar power capacity additions could also surpass those in coal power projects, which are slowing down.

Mart.

warrenb

Martyn1981 wrote: »

I've been reading the news and the consultation paper. I'm reading that pre-accreditation relates to registering a system prior to it being fully signed off.

In the case of domestic installs that doesn't seem to matter since you can't register till you have all the paperwork confirming the install is complete.

Can someone explain/confirm the situation?

Mart.

The way I read it, is this, if you are doing a 50kw or more install then you would be able to pre-accredit for the FiT payment at the rate on the date you apply for the pre-accreditation, before you even build the site.
This is that you can budget ahead. The problem is people are pre-accrediting way before the installation of the Farm to get a better FiT rate.

It looks like they want to bring them into line with a domestic installation whereas you get the rate at the time you apply for the FiT.

That is the way I read it.

Classically if you read the Guardian report, with a nice picture of a man on a roof with a panel, you would think that subsidies for domestic installs is coming to and end.

zeupater

Martyn1981 wrote: »

I've been reading the news and the consultation paper. I'm reading that pre-accreditation relates to registering a system prior to it being fully signed off.

In the case of domestic installs that doesn't seem to matter since you can't register till you have all the paperwork confirming the install is complete.

Can someone explain/confirm the situation?

Mart.

Hi

Consultation - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447314/FITs_pre-accreditation.pdf

The way I read it is that there's currently a loophole within the system for larger installations which require planning consent etc.

The way I read it is that pv farm developments have the ability to 'book' their FiT rate at a point in time in order to provide a degree of certainty for the ROI from their business model, therefore providing protection against tariff digression(s). This initially makes sense, but it leaves open an opportunity to fix a FiT rate very early in the project development process, then use the full allowable period to pass before actually installing the plant in order to take advantage of falling capital costs.

My guess is that there are more projects registered than will ever be built (this serves the developers well), which makes FiT scheme forecasting pretty hard, therefore DECC are looking at a way to remove this anomaly .... of course, there's also the mess which DECC found themselves in in 2011/12 to consider, where a consultation before a high-impact change would have resulted in a 'clean' cut-over, negating the legal challenge which lasted just about long enough for anything already in the system to receive the 'higher' rate anyway ......

If I worked for HM Treasury and asked DECC for a forecast of departmental (&scheme) expenditure in order to establish what a 40% cost saving would look like and the answer came back as 'We don't know as there's no control' I'd be pretty miffed and tell them to sort themselves out ... to me, it looks like someone has simply asked the question which needed to be asked - all part of the government's drive for efficiency and a solution for the UK's 'productivity puzzle' ....

HTH
Z

nigelpm

theboylard wrote: »

And it's landed.... Small solar farms get no subsidy from April next year.

http://www.bbc.co.uk/news/science-environment-33619017

And absolutely right IMHO.

I've made these points before but the government scheme is far too generous and what you have at the moment is well off individuals taking advantage of this by investing in Solar Farms and taking 7-10% tax free returns.

Quite rightly the government has realised this and pulled back.

gazapc

zeupater wrote: »

The way I read it is that there's currently a loophole within the system for larger installations which require planning consent etc.

The way I read it is that pv farm developments have the ability to 'book' their FiT rate at a point in time in order to provide a degree of certainty for the ROI from their business model, therefore providing protection against tariff digression(s). This initially makes sense, but it leaves open an opportunity to fix a FiT rate very early in the project development process, then use the full allowable period to pass before actually installing the plant in order to take advantage of falling capital costs.

My guess is that there are more projects registered than will ever be built (this serves the developers well), which makes FiT scheme forecasting pretty hard, therefore DECC are looking at a way to remove this anomaly .... of course, there's also the mess which DECC found themselves in in 2011/12 to consider, where a consultation before a high-impact change would have resulted in a 'clean' cut-over, negating the legal challenge which lasted just about long enough for anything already in the system to receive the 'higher' rate anyway ......

I would hardly describe it as a loophole, it was deliberately introduced to aid business decisions and provide investment certainty.

The project (wind, solar, hydro or AD) has to have a grid connection offer and signed acceptenace/payment and valid planning permission.You can't put in speculative bids for sites which have yet to get permission. You then have 6 months in the case of solar, 12 months for wind & AD and 2 years for hydro to build out and get the guaranteed tariff. I would hardly call 6 months an overly excessive amount of time considering the time to sign contracts, place orders etc.

This isn't just solar farms, roof top solar, medium scale wind, farm AD, community projects all fall into this category and will be affected.

In financing, unknowns = risk and risk = higher cost of capital making renewables more expensve and less attractive. If you want to make renewables cheap provide investment certainty and then watch as the cost tumbles.

So far, UK has been very good at grandfathering the rights projects get when they are built which gives much confidence to the market. However the retrospective removal of CCL/LECs in the budget and now this will certaintly move to 'cool' the market slightly.

The most frustrating thing about this is DECC and the treasury harping on about cutting costs for 'hard working families'. If you cared that much you would abandon nuclear, tidal barrages, marine renewables, offshore and go for onshore wind and solar. Be honest and admit it is to please the Tory voters in rural shires and don't tarnish the most promising renewables.

gazapc

DECC (like other departments) conducts an impact analysis as part of the proposal.

http://www.solarpowerportal.co.uk/news/in_depth_deccs_ro_closure_risk_assessment_1801

For its workings DECC has established four scenarios using figures it has already compiled as well as industry analysis. Under the ‘low’ estimate just 800MW of solar capacity would be added each year, ‘medium’ would see 1.25GW added, ‘high’ 2GW and a ‘high-high’ scenario in which 3GW of solar capacity is added each year.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447323/Solar_PV_within_the_RO_consultation_-_Impact_Assessment.pdf

In terms of the revised deployment scenarios, the equivalent impact on average household electricity bills is £0.80 in 2020/21, also based on the medium deployment scenario, with a range from £0.50 to £1.20, and as high as £1.80 if 3GW of solar comes forward.

So in the medium case DECC have just slashed 80 pence from a bill and even if we deployed 3 GW of solar per year under the RO, we would save £1.80 per year.

zeupater

gazapc wrote: »

I would hardly describe it as a loophole, it was deliberately introduced to aid business decisions and provide investment certainty.

The project (wind, solar, hydro or AD) has to have a grid connection offer and signed acceptenace/payment and valid planning permission.You can't put in speculative bids for sites which have yet to get permission. You then have 6 months in the case of solar, 12 months for wind & AD and 2 years for hydro to build out and get the guaranteed tariff. I would hardly call 6 months an overly excessive amount of time considering the time to sign contracts, place orders etc.

This isn't just solar farms, roof top solar, medium scale wind, farm AD, community projects all fall into this category and will be affected.

In financing, unknowns = risk and risk = higher cost of capital making renewables more expensve and less attractive. If you want to make renewables cheap provide investment certainty and then watch as the cost tumbles.

So far, UK has been very good at grandfathering the rights projects get when they are built which gives much confidence to the market. However the retrospective removal of CCL/LECs in the budget and now this will certaintly move to 'cool' the market slightly.

The most frustrating thing about this is DECC and the treasury harping on about cutting costs for 'hard working families'. If you cared that much you would abandon nuclear, tidal barrages, marine renewables, offshore and go for onshore wind and solar. Be honest and admit it is to please the Tory voters in rural shires and don't tarnish the most promising renewables.

Hi

Don't look to blame me as I fully understand why it was introduced, that's why I wrote .... "This initially makes sense, but it leaves open an opportunity to fix a FiT rate very early in the project development process, then use the full allowable period to pass before actually installing the plant in order to take advantage of falling capital costs." ... however, it did create a loophole which is open to being taken advantage of.

Further to the above, my comment ...
"My guess is that there are more projects registered than will ever be built (this serves the developers well), which makes FiT scheme forecasting pretty hard, therefore DECC are looking at a way to remove this anomaly "
... is fully supported by note 2 on page 8 of the consultation document ...
"For projects pre-accrediting before December 2013, we recorded attrition rates of 15% for sub-100kW wind, 25% for wind between 100kW and 5MW, 11% for sub-500kW AD and 0% for AD between 100kW and 5MW. For solar PV projects pre-accrediting both before December 2013 and June 2014, the average attrition rate was 9%."
... which raises a bit of a quandary for the industry because (consultation para 1.6) ....
"the level of pre-accreditation applications provides an indication of future budget spend, the capacity of pre-accredited installations is counted towards committed spend under the scheme and therefore contributes to degression triggers for the period during which they pre-accredit, This capacity is counted regardless of whether installations then go on to achieve full accreditation."
... therefore projects which don't go-ahead because of business investment decisions resulting from tariff degression will have contributed to the very degression decision ....

Conditions around here aren't particularly good for on-shore wind so there's little vocal opposition to it that I know of, but on the pv front there are plenty of <50kWp systems, a handful of ~5MWp sites an a couple at ~20MWp, add in some AD and biomass schemes and we're pretty well served on medium/large-scale renewables compared to the national average. I've posted my views on NIMBYism on this forum many times regarding on-shore wind, flooding valleys, tidal flow, Severn barrage etc and effectively despair at the weight of public opinion which is attributed to vocal NIMBY, lobbying and activist groups .... we used to have them around here on pv - doom, gloom, bright lights, reflections, inverter hum, aesthetics, wildlife, waste of productive land all used by a coalition of vocal minority groups to whip up the anti ... then the first 5MWp site was completed and hardly anyone noticed. Once the site is started, it doesn't take long to complete, the latest 5MWp plant took about 2months from opening a temporary access and laying a concrete site hard-pan through to array completion, removal of the hard-pan and ploughing the field it was in - in other words, it doesn't take a period encompassing two planned tariff degressions to get even a decent size system up-and-running - as for ~50kWp rooftop systems on farm/industrial/commercial buildings (which usually have 3phase supply), after a few phone calls and some basic paperwork, the timescale from decision to a working system isn't much different to a domestic install ...

So, in reality, where's the issue ? .... If I, or anyone else, commissions an install tomorrow, surely the 'investment security' risk of tariff reduction should be equal to that available to a business investment opportunity. The alternative, of course, is to open (/re-open ?) questions regarding "EU State aid approval for the FIT scheme" (p.8/para 1.9) ....

HTH
Z

gazapc

zeupater wrote: »

Hi

Don't look to blame me as I fully understand why it was introduced, that's why I wrote .... "This initially makes sense, but it leaves open an opportunity to fix a FiT rate very early in the project development process, then use the full allowable period to pass before actually installing the plant in order to take advantage of falling capital costs." ... however, it did create a loophole which is open to being taken advantage of.

Further to the above, my comment ...
"My guess is that there are more projects registered than will ever be built (this serves the developers well), which makes FiT scheme forecasting pretty hard, therefore DECC are looking at a way to remove this anomaly "
... is fully supported by note 2 on page 8 of the consultation document ...
"For projects pre-accrediting before December 2013, we recorded attrition rates of 15% for sub-100kW wind, 25% for wind between 100kW and 5MW, 11% for sub-500kW AD and 0% for AD between 100kW and 5MW. For solar PV projects pre-accrediting both before December 2013 and June 2014, the average attrition rate was 9%."
... which raises a bit of a quandary for the industry because (consultation para 1.6) ....
"the level of pre-accreditation applications provides an indication of future budget spend, the capacity of pre-accredited installations is counted towards committed spend under the scheme and therefore contributes to degression triggers for the period during which they pre-accredit, This capacity is counted regardless of whether installations then go on to achieve full accreditation."
... therefore projects which don't go-ahead because of business investment decisions resulting from tariff degression will have contributed to the very degression decision ....

Conditions around here aren't particularly good for on-shore wind so there's little vocal opposition to it that I know of, but on the pv front there are plenty of <50kWp systems, a handful of ~5MWp sites an a couple at ~20MWp, add in some AD and biomass schemes and we're pretty well served on medium/large-scale renewables compared to the national average. I've posted my views on NIMBYism on this forum many times regarding on-shore wind, flooding valleys, tidal flow, Severn barrage etc and effectively despair at the weight of public opinion which is attributed to vocal NIMBY, lobbying and activist groups .... we used to have them around here on pv - doom, gloom, bright lights, reflections, inverter hum, aesthetics, wildlife, waste of productive land all used by a coalition of vocal minority groups to whip up the anti ... then the first 5MWp site was completed and hardly anyone noticed. Once the site is started, it doesn't take long to complete, the latest 5MWp plant took about 2months from opening a temporary access and laying a concrete site hard-pan through to array completion, removal of the hard-pan and ploughing the field it was in - in other words, it doesn't take a period encompassing two planned tariff degressions to get even a decent size system up-and-running - as for ~50kWp rooftop systems on farm/industrial/commercial buildings (which usually have 3phase supply), after a few phone calls and some basic paperwork, the timescale from decision to a working system isn't much different to a domestic install ...

So, in reality, where's the issue ? .... If I, or anyone else, commissions an install tomorrow, surely the 'investment security' risk of tariff reduction should be equal to that available to a business investment opportunity. The alternative, of course, is to open (/re-open ?) questions regarding "EU State aid approval for the FIT scheme" (p.8/para 1.9) ....

HTH
Z

Apologies if it came over a little heated, certainly not aimed at you!
I wasn't aware the attrtion rates for especially for FiT wind were at such a level (my work is under the RO mostly). But to completely remove pre-accreditation as a result of a miniority of sites seems unfair. However not saying that nothing should be done, perhaps more capacity bands with the lower dropping to three months.

And sure the build times for large ground mount solar in this country are amazing. But behind the two month build time there will have been tendering, contacting financing, contract negotiation, commiting to an EPC contractor, design iterations, geotechnical studies, condition discharge, organising wayleaves for the grid connection, ordering and manufacturer of panels+framing+cabling+transformers+inverters, pre-construction technical due diligence, legal due diligence and financing deals to just name a few before construction even starts. In a push you can do these items relatively quickly but it still drags on and it can't be done fast for every project like a 50 kW roof top system can.