Government has lowered the threshold at which suppliers have to offer customers with small-scale generation export payments. Meanwhile, it says brown power can receive those payments where co-located.
Suppliers with 150,000 customers will need to offer some form of payment for power exported by 1 Jan 2020. The rate is not set – just more than nothing at all times of export and metered generation. Government said it will review potentially setting minimum tariffs if the market doesn’t deliver a competitive range of options.
Suppliers can decide how to set up Smart Export Guarantee (SEG) tariffs – for example, flat payments or time of day. Non-domestic suppliers are excluded from the obligation, but can offer SEGs if they choose. There’s no requirement to meet any particular energy efficiency standards to receive export payments.
Beis said it recognises that community generation schemes may find it difficult to get off the ground without the kind of investment certainty provided by Fits. It suggested power purchase agreements (PPAs) may be a better option for those projects, but added it is exploring new public-private models for these schemes that might make them attractive to investors.
Generators receiving SEGs can also receive other support measures. Meanwhile, SEG payments can also be made on grid-sourced electricity where storage or a non-low-carbon generator is co-located with the SEG installation. Suppliers do not have to make SEG payments on the ‘brown’ element of exported power though they can if they like, but would require separate metering if they want to claim REGOs.
Ofgem will report annually on how the SEG scheme is working, and what suppliers are offering small generators.
The arrangements apply to anaerobic digestion, hydro, micro-combined heat and power (with an electrical capacity of up to 50KW), onshore wind, and solar photovoltaic exporters with up to 5MW capacity.