A percentage obligation on suppliers emerged as one of the options most favoured by the renewables industry in responses to the DTI's consultation exercise on renewable energy earlier this year. Many respondents, however, including the BWEA and the Confederation of Renewable Energy Associations (CREA)-argued for a dual policy that would combine a percentage obligation (backed by trade in renewable credits) with a long term contract mechanism to continue to provide support for less mature technologies.
Without separate technology "bands," a percentage obligation would create a demand merely for the cheapest, such as energy from waste. Under this scenario, offshore wind and energy crops-both seen as vital to help the UK achieve the government's goal of 10% of electricity from renewables by 2010-would have little prospect of being realised for at least five years, says Nick Goodall of the BWEA.
Signals are good
He is optimistic that government ministers will respond positively to the industry's concerns. "I do not believe there is an ounce of political desire to be seen as the government that shafted renewables," he says. Ministers are already aware of the danger to renewables from the purely market led mechanism that their own economists are intent on, he points out. Environment Secretary Michael Meacher promised to set up a meeting between himself, new Energy Minister Helen Liddell and the BWEA to discuss the issue after the BWEA had drawn his attention to the threat.
Liddell also acknowledged the BWEA's worries last month, stating she is "anxious that nothing stands in the way of" the 10% renewables target being delivered. Goodall adds that meetings are scheduled between the industry and Liddell.
Meantime, CREA, in parallel with the BWEA, is revising its response to the DTI and is advocating a so-called "bridge solution"-a mechanism that provides a bridge under which renewables can develop and move towards commercial viability. It was first put forward by the Non-Fossil Purchasing Agency and is a modification of the current NFFO system. It proposes a capacity obligation on all distributors allowing 15 year power purchase contracts to be awarded to renewable generators, as at present, through a competitive tender. An important feature of the proposal is that it is compatible with the new electricity trading arrangements that are proposed by Energy Regulator Callum McCarthy.
But time may be running out. As Liddell points out, the enabling powers needed for a new renewables support mechanism are to be included in the Utilities Bill, which she hopes to introduce in the next parliamentary session. The broad shape of the bill must be in place in time for parliament's October opening.