Who is responsible for implementing FITs
Eligibility for FITs is defined through the Feed-in Tariffs (Specified Maximum Capacity and Functions) Order 2010 as amended by the Feed-in Tariffs (Specified Maximum Capacity and Functions) (Amendment) Order 2011 (“the FITs Order”); and associated modifications to the Standard Conditions of Electricity Supply Licences made by the Secretary of State under section 42(3) of the Energy Act 2008. Application of these is the responsibility of the electricity suppliers and Ofgem who administers the scheme.
Ofgem’s key role is in establishing and maintaining the Central FIT Register, administration of the levelisation process and the accreditation of installations which are greater than 50kW in capacity (or are of anaerobic digestion technology). Ofgem is also responsible for ensuring suppliers comply with the scheme. Ofgem’s Feed-In Tariffs website is available at: Ofgem Feed-In Tariffs.
Who pays for FITs?
The Feed-in Tariffs (Specified Maximum Capacity and Functions) Order 2010, as amended (“The FITs Order”) provides for the annual determination by the Secretary of State of a number of matters necessary for the functioning of the FITs scheme. These are included in article 14 and article 28 of the FITs Order and comprise:
(a) various parameters in determining how the value of exports to the grid from FITs generators are shared among licensees; and
(b) the administrative costs of licensees which constitute qualifying FIT costs (QFCs).
As part of the comprehensive review, currently out for consultation, we are seeking to establish whether the level of export tariffs continues to reflect the real value of FITs exports. We are therefore proposing to extend the existing arrangements at least until the outcome of this consultation is decided. Any necessary changes decided on as a result of the consultation would be implemented by an amendment to the FITs Order if necessary.
Qualifying FITs costs have been determined on the basis of information provided by FITs licensees in January 2012. For large licensees the determination also takes into account the effect on costs of the greater than expected uptake of FITs during FITs Year 2.
As in earlier FITs years, there are different values for larger and smaller licensees because the former have considerable economies of scale. However, the threshold for determining whether a licensee is considered “large” is to be changed. Under the terms of the Secretary of State’s determination, “large FIT licensee” means a FIT licensee that either supplies electricity to at least 125,000 domestic customers; or together with its Affiliates (as defined in Schedule A to Standard Licence Condition 33) jointly supplies electricity to at least 125,000 domestic customers, as at 31 December 2011.
The determinations required for administration of Feed-in tariffs (FITs) in accordance with articles 14 and 28 of the FITs Order for FITs year 3 (1 April 2012 - 31 March 2013) were made and signed on 1 March 2012. They can be found below:
What has uptake of FITs been like?
Information on FITs uptake extracted from Ofgem’s FITs Central Register is received by the DECC Energy Statistics team on a quarterly basis. This data is used to produce a summary of the number and capacity of installations and is included in DECC’s energy statistics each quarter, available at DECC Energy Statistics (see table ET 5.6), which also now includes a FITs monthly update which can be viewed in the monthly tables.
Ofgem also makes available via its website various pieces of information on FITs uptake. This includes live information on uptake via the Renewables and CHP Register (View Public Records link),quarterly levelisation data and a quarterly newsletter.
What other changes have been made since the FITs scheme started?
Feed-in Tariffs Amendment Order 2011
The Feed-in Tariffs (Specified Maximum Capacity and Functions) (Amendment) Order 2011 was laid in Parliament on 4 May 2011 and came into force on 30 May 2011.
The 2011 Amendment Order is not part of the FITs review but has been developed in the light of early experience of implementing FITs. It makes a number of modifications and housekeeping amendments to the Feed-in Tariffs (Specified Maximum Capacity and Functions) Order 2010 that are designed to ensure the FITs scheme is being delivered as envisaged.
Amendments include those that:
- Provide a transitional arrangement allowing micro-hydro stations (with a capacity of 50kW or less) that are first commissioned between 1st April 2010 and 1st October 2011, to be accredited for FITs under the ROO-FIT process. After this transitional period, the MCS-FIT accreditation process will apply as originally envisaged.
- Extend by a year the period in which eligible microgenerators (with a capacity of less than 50kW) can notify Ofgem to enable them to transfer from the Renewables Obligation to FITs.
- Ensure that the original policy intent on FITs and grants is properly reflected, by time-limiting the period in which installations that have benefited from a public grant can also be eligible for FITs under the de minimis rules.
The Explanatory Memorandum is available on the legislation.gov.uk: Feed-in Tariffs (Specified Maximum Capacity and Functions) (Amendment) Order 2011 - Explanatory Memorandum page.
The Impact Assessment supporting the 2011 Amendment Order, is also available:
Note: In June 2011 the Coalition published a Microgeneration Strategy which proposed to withdraw the exclusive link between micro hydro and the MCS for the purpose of FITs eligibility. It also confirmed that the comprehensive review of FITs is considering how this can be taken forward. We will consult on the comprehensive review later this year. The review will be completed by around the end of 2011 with any resulting changes introduced from April 2012 (unless the review reveals a need for greater urgency).
In the meantime, and pending the outcome of the comprehensive review, arrangements have been made to extend the current transitional arrangement so that micro-hydro stations (with a capacity of 50kW or less) will continue to be accredited for FITs under the ROO-FIT process. The Feed-in Tariffs (Specified Maximum Capacity and Functions) (Amendment) Order 2012 that will come into force on 1 April extends this provision until 30 September.
Key Feed-In Tariff scheme documents
To view all Feed-In Tariff scheme documents, including supporting documents and evidence published alongside the consultation, please view the FITs consultation response page: Consultation on Renewable Electricity Financial Incentives.