Clearer export reward for distributed generation in U.K.


London, United Kingdom — (METERING.COM) — May 29, 2007 – A clearer export reward for microgenerators is among a package of measures proposed to enable distributed generation to compete freely and effectively with larger-scale, centralised generation in the U.K.

The four-point package, which was put forward alongside the country’s White Paper on energy last week, includes new market and licensing arrangements, the provision of distributed generation connection services, and improved information to potential users of distributed generation, as well as the provision of greater transparency of prices offered by suppliers to microgenerators for exported electricity in a simple and easy to understand format.

Suppliers are not currently required to make an offer for exported electricity. However, most suppliers do now offer tariffs, although few of these tariffs are widely advertised and the terms vary considerably from one supplier to another, making it difficult for customers to determine which tariff will best meet their circumstances. All of the country’s six major energy suppliers have now committed to publishing easily accessible export tariffs, which is an important first step to giving clearer export reward.

The review says that government anticipates that these measures will lead to improved offerings for distributed generators. At the moment, exported electricity from microgenerators represents only a fraction of the total grid capacity, but as more microgenerators join the market and export their electricity, the overall amount of exported electricity will generate its own economies of scale, predictability and ultimately value.

Microgeneration technologies are those installed by individuals in homes, schools, communities and businesses, and include technologies such as micro-wind turbines or solar PV panels. Many microgenerators produce more electricity than they need, which can be sold or ‘exported’ to suppliers. The uneconomic status of exported electricity currently applies only to small distributed generators – above 30 kW, distributed generators are metered on a half-hourly basis, allowing suppliers the ability to offer tariffs linked to the actual time of supply.

The measures have resulted from a collaboration between the Department of Trade and Industry (DTI) and the energy regulator Ofgem, to review the barriers to distributed electricity generation, including combined heat and power.

Through the Low Carbon Buildings Program (LCBP) the DTI is currently making available £11.9 million in grants for the installation of domestic microgeneration systems. In the last year, since the launch of the LCBP, 2,175 installations on homes have been directly funded.