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British Feed-in Tariff Policy Becomes Law–Was Once Unthinkable

Article by: Paul Gipe


The Queen gave her “royal assent” to Britain’s long-debated Energy Bill on November 26, 2008, putting into law Britain’s commitment to dramatically cut its greenhouse gas emissions.

The Energy Bill also contained provisions calling on Gordon Brown’s Labour government to implement a system of feed-in tariffs for small renewable energy producers by 2010.

The feed-in tariff provisions were once unthinkable in the British political landscape. They said it “couldn’t be done” is how British campaigners described the remarkable success.

Since Margaret Thatcher, Britain has relied on a series of call for tenders and eventually a complex quota system to build a modest wind energy industry dominated by the word’s largest electric utilities. There was little more than token support for small-scale renewables through traditional subsidy programs under successive Conservative and Labour governments.

Meanwhile on the continent, renewables were booming, first in Denmark, then in Germany, France, and Spain through the use of innovative systems of feed-in tariffs. These systems of Advanced Renewable Tariffs spurred growth of a variety of renewable energy technologies at all scales. In Germany, a large percentage of solar and wind energy are being developed by homeowners, farmers, and small investors.

The feed-in tariff provisions of Britain’s Energy Bill are modest in comparison to those in other countries. In contrast to continental European policies, projects are limited to no more than 5 MW. There are no project size limits in Germany, for example. Nor does the Energy Bill contain the specific provisions or prices that are part of such acts in France and Germany. Specific provisions will be determined administratively in 2009.

The Energy Bill leaves in place Britain’s existing Renewable Obligation Certificate trading program for larger projects. The two programs, the Renewable Obligation and the feed-in tariff system, will operate in parallel.

There was cross party agreement on amendments to the bill that included the essential elements of any successful feed-in tariff policy. For example, there was an amendment that called for different tariffs for different renewable energy technologies a key feature of the policies in Germany, France, and Spain. The cross party agreement included both the Conservatives and the Liberal Democrats.

The campaign for the Energy Bill was led by Friends of the Earth (UK) and Britain’s Renewable Energy Association.

According to FOE campaigner David Timm, the Labour government now appears committed to introducing a true system of feed-in tariffs by the end of 2010.

Alan Simpson, Labour MP, led debate in the House of Commons, taking issue not only with expected opposition to feed-in tariffs from electric utilities but also from the renewable energy industry itself. “On the record, many of the big energy suppliers have been fighting tooth and claw to prevent us from doing anything as bold and imaginative as we are doing. The Association of Electricity Producers had lobbied for a threshold of 50 kW. The British Wind Energy Association lobbied, until the last moment, for a threshold of 500 kW. Such demands would preclude the opportunity to develop genuine, transformational renewable energy systems on a community, town or city scale. The Secretary of State should be praised for his determination and willingness to push the boat out much further than many of those vested interests would have felt comfortable with.”

Observers noted that no one rose in Commons to oppose final passage.

Conservative Party leaders put the ruling Labour Party on notice that if the feed-in tariff provisions didn’t pass, they would support the policy in a subsequent Conservative Government.

Previously, Gordon Brown suffered an embarrassing back-bench revolt over the issue from his own party members.

The move by the British government has far reaching ramifications. The English speaking world has been more resistant to feed-in tariffs than non-English speaking countries, sometimes on ideological grounds, sometimes simply out of ignorance. Many North Americans, for example, attribute continental Europe’s success with renewable energy to renewable portfolio standards, which is not the case.

Now that the British have clearly moved toward the camp favoring feed-in tariffs, there may be less reticence to do so elsewhere in the Anglophone world.