The new ROC banding levels were due to be announced by the Department if Energy and Climate Change in September 2011, but have not yet been published even though the unannounced levels come into effect in less than a year and a half.
“When you consider the 5-10 year duration of a typical project from planning through to commissioning, making sensible, long-term investment decisions is virtually impossible,” highlights REpower UK’s Managing Director, Rick Eggleston. “I believe the on-going delay… is problematic for the industry, affecting investor confidence and making long term planning impossible.”
Eggleston warns that beyond 2013, the sector will have to go through the whole process again in advance of March 2017 when the ROC system is due to be scrapped and replaced with a Feed-in Tariff (FiT) which carries its own uncertainties.
“Operating a business, or in this case an entire industry, in a ‘stop/start’ fashion is incredibly expensive, as well as being damaging to investor confidence. We are already seeing capital being expended in an attempt to accelerate projects to complete ahead of the March 2013 deadline. With so many projects pulled forward, this is likely to create a drop in activity post 2013, followed two years later by a further peak to build in advance of 2017,” says Eggleston. “We will also see projects being pushed through the expensive and time consuming planning process, in some cases only to become unviable when the new revenue mechanisms are announced.” In addition to decisions on individual projects, there is also the bigger question of setting up local supply chains, which create UK manufacturing jobs. The UK needs to compete for these jobs with its international neighbours, and this needs a stable UK market.
“The industry is already planning projects, supply chain and support infrastructure today which will be in operation beyond 2030, yet we have no clear basis upon which to make an investment decision,” says Eggleston, who believes the government “needs to take a lead by stating a clear policy, and giving industry time to adapt to any changes” if it is committed to creating a low carbon economy. “The industry can then do the rest,” he says.
Since 2005, REpower UK has installed over 500 megawatts in England, Scotland and Wales. The company is a wholly owned subsidiary of Germany based REpower Systems AG, one of the world’s leading manufacturers of onshore and offshore wind turbines with rated outputs of 2.05 MW to 6.15 MW.
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