DECC announce January tariff review to tackle small-scale FIT degression

In very welcome news, DECC minister Greg Barker MP has informed us that they intend to launch a consultation in January to address Feed-in-Tariff (FIT) degression for small scale AD, which will include a tariff review.

This is a huge step in the right direction, and addresses the key industry objective of action from government to tackle the impending 20% tariff reduction for new sub 500kW projects in April 2014.

In a letter sent to ADBA, REA, NFU, CLA and RASE, Mr Barker stated that the degression mechanism is resulting in ‘unintended consequences…meaning degression is likely to come sooner than expected’.

He set out that ‘action may well be needed to avoid the risk of damage to the genuine small-scale AD sector’, with DECC planning to ‘consult on measures, including a tariff review, in January’.

At a time when there are a number of competing interests within the energy sector and the debate around the cost of energy is high on the agenda, it is very welcome news that the minister has recognised the particular issues and concerns of the AD industry.

Joint work between ourselves the REA, NFU, CLA and RASE, as well as input from members, has been crucial in making a strong case to government that swift action is needed to ensure the small scale AD sector can deliver its full potential.

Next Steps

This work will clearly need to continue in the coming months to produce a strong, credible consultation response which achieves viable tariff levels – member input will of course again be vital in this process.

There is of course a risk of hiatus while the consultation is ongoing – we will be working with DECC to provide as much certainty as possible during the process, but it is obviously to be welcomed that action is now being taken.

We will be providing more detail through the Members’ Area of our website and our news blog. The letter from Greg Barker MP can be viewed here.

Posted in: ADBA News, Industry News, Members' press release, News for Members, Policy updates, R&D Updates

Tags: CLA, DECC, degression, Feed-in-Tariff, FIT, Greg Barker, NFU, RASE, REA, small scale AD