The Department of Business, Energy and Industrial Strategy (BEIS) has published a response to their consultation on the future for small-scale low-carbon generation, which sought views on policy proposals for a Smart Export Guarantee (SEG).
The SEG will require suppliers with at least 150,000 domestic customers to provide a minimum of one tariff offer to small-scale low-carbon generators. Exporters of up to 5MW capacity of anaerobic digestion, hydro, micro-combined heat and power, onshore wind, and solar photovoltaics are eligible for payment.
It is the government’s opinion that small-scale low-carbon electricity generation should be supported by competitive, market-based solutions. To this effect, the government will not specify a minimum tariff rate in order to allow the market to develop. However, a supplier must provide payment greater than zero at all times of export.
The SEG is a replacement for the Feed-in Tariff (FiT), which closed to new generators in March 2019. The Feed-in Tariff scheme was originally introduced in April 2010 in order to incentivise the development of small-scale renewable generation from decentralised energy solutions. Generators were paid a fixed rate determined by the Government, which varied by technology and scale.
How will this impact you?
All suppliers that meet the SEG criteria will be required to offer at least one tariff by an expected date of 31 December 2019, providing small-scale generators with a choice of who they want to export to.
Currently, there are very few suppliers that offer tariffs of this nature. However, as the deadline approaches it can be expected that all larger suppliers will begin to offer their own options, allowing generators to choose the best tariff for themselves.
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