U.K. sees growing viability of renewables

The U.K. Department of Trade and Industry has flashed a green light to 261 small nonfossil-fueled power projects with combined capacity to generate almost 1,200 MW. The projects will be built under U.K.'s fifth NonFossil Fuel Obligation (NFFO) order, which commits electric power companies to buy part of their power generated from nonfossil fuels. DTI said that the 1,117 MW total capacity makes this the largest obligation since the NFFO scheme began in 1990. It will include landfill gas,

Nov. 2, 1998

2 min read

The U.K. Department of Trade and Industry has flashed a green light to 261 small nonfossil-fueled power projects with combined capacity to generate almost 1,200 MW.

The projects will be built under U.K.'s fifth NonFossil Fuel Obligation (NFFO) order, which commits electric power companies to buy part of their power generated from nonfossil fuels.

DTI said that the 1,117 MW total capacity makes this the largest obligation since the NFFO scheme began in 1990. It will include landfill gas, waste, hydroelectric, and wind power schemes in England and Wales.

Electricity generated from these projects is also expected to be the cheapest under the NFFO program: "The average price of power expected to be generated is only 2.71 pence/kw-hr (4.6¢/kw-hr)."

This compares with an average price of 2.67 pence/kw-hr (4.5¢/kw-hr) currently being charged by U.K.'s two large electricity generators, and is down sharply from the 4.35 pence/ kw-hr (7.4¢/kw-hr) for nonfossil fuel projects under the third NFFO order in December 1994.

Renewables drive

John Battle, minister for energy and industry, said the fifth NFFO order is the first step in U.K.'s strong drive for renewables. Forty renewable power generators recently brought U.K. renewables nearer to viability by securing supply contracts in the commercial market (OGJ, Aug. 31, 1998, p. 27).

Meanwhile, Stephen Littlechild, director general of U.K. regulator Office of Electricity Supply, gave another hint of the growing viability of renewable power by cutting the levy charged to customers to support renewables.

As of Jan. 1, the fossil fuel levy on electricity customers will be reduced to 0.7% of annual bills, down from 0.9%. Government said the fall reflects the falling cost of renewable energy projects.

"The price reductions have exceeded my expectations," said Battle, "and reflect well on an industry determined to make renewables competitive with other sources of energy.

"Many of the projects that I have required to be contracted will be generating well into the next century. We are now building renewable energies solidly into our future."

Battle said government continues to encourage renewable technologies not yet included in the NFFO program: "I have already launched a consultative document on opening up NFFO in future to offshore wind energy. We hope to see five or six projects initially."