United Kingdom

United Kingdom

Significant neta damage

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A survey conducted by the Confederation of Renewable Energy Associations (CREA) into the impact of Britain's new electricity trading arrangements (NETA) on renewable energy generators during its first months of operation reports unanimous disappointment at the low rates being offered by electricity retailers for electricity from renewables. The survey also reports that the smallest wind generators feel overwhelmed by the complexity of the current trading situation. One small wind generator had its contract terminated by its purchaser at the start of NETA, while two are considering removing their wind turbines as they are not making any profit.

According to the report, renewable generators are trapped in a period between the start of NETA in March 2001 and the anticipated start of the new Renewables Obligation in January 2002. The obligation will require electricity retailers (suppliers) to contract for a proportion of their power from renewable sources. Already, contracts offered by retailers contain provisions for the sale of future Renewables Obligation Certificates (ROCs), which will provide proof of purchase of green energy. Contracts also reflect benefits to the suppliers of exemption of renewable electricity from the Climate Change Levy (CCL). Without the renewables obligation and CCL exemption, retailers would have little incentive to buy renewables output, states the report.

"In many ways it is too early to tell the true extent of the damage NETA will cause to the value of renewable electricity. Although already it is clear that the damage is significant, the extent may not have been fully revealed," the report concludes.

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