However, this must be seen in the context of the adverse market conditions under which renewable energy operates. The buying-in rate for individual private generators is roughly one-fifth the price paid for electricity by the average domestic consumer. Only when heavily subsidised by the non-fossil-fuel obligation (NFFO) is renewable energy anywhere near competitive.
At the same time the NFFO is heavily biased towards wind power. This is a misuse of the NFFO, since it is effectively subsidising the electricity generators by enabling them to avoid paying a market price to private generators. It ensures that private generation is inherently uneconomical, helping to secure the energy utilities' monopoly position.
It is another instance in which the UK stands apart from its EU partners, who offer market rates to private generators. The NFFO was designed to promote the development and wider use of renewable energy whilst also lowering energy demand, for example by making low-energy lightbulbs more comparable in cost to conventional bulbs.
In the long term this penalising of private generators could backfire on the energy utilities. As the technology of PVs etc improves and their cost falls, and as storage technology develops, private generators will find it cost-effective to be independent of the grid. Already there are energy- autonomous buildings in existence, which should sound alarm bells in the marble halls of the energy utilities.
If we are serious about curbing carbon emissions, this is an anomaly which must be rectified as a matter of urgency.
Professor PETER F SMITH
Chairman, RIBA Environment and Planning Committee
London W1Reuse content