Large suppliers to be obliged to offer low-carbon export tariff for small plant

Large suppliers will have to offer export tariffs – above zero – to small-scale low-carbon power generators with projects sized below 5MW, under new proposals launched by BEIS today. The measure aims to give small low-carbon plant a route to market from March 2019 onwards, when no new installations will be able to register to receive a feed-in tariff.

BEIS believes that large suppliers (it proposes those with more than 250,000 customers) might offer one of a variety of export tariffs – anything from a flat rate, to a duel band peak/offpeak, to one that is determined by day-ahead half-hourly market prices. The Department hopes that a market in export tariffs will develop.

Generators will not have to pay to export when the price is negative – BEIS says that is likely to remain rare and a Baringa estimate suggests that until 2023 it will happen only in 68 hours per year, in day-ahead markets.

BEIS also anticipates that small-scale generation will be able to participate in local response markets, run by DSOs to manage local grid constraints, saying that option will be “providing an additional revenue stream” to owners.

In its consultation BEIS asks whether meters are fit for purpose to underpin the new tariffs –  there are questions over whether smart meters, even the more modern Smets 2 type, will be able to provide half hourly export data as required.  It also raised the question of network fees, noting that small generators would be able to avoid some power imports and may therefore see reduced network charges at present – but that may be addressed by Ofgem’s current work on network charges.

The consultation closes on 5 March. Full consultation here

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