UK Feed in Tariff
A Feed In Tariff is particularly suited for small scale generation since it avoids the need for lengthy and complex negotiations with your electricity company to arrange for them to purchase the energy produced.
What is a Feed in Tariff?
A fixed payment is provided by the electricity regulator, Ofgem, for every kilowatt hour (kWh) generated (the “generation tariff”).
Another payment is provided by the electricity supplier, additional to the generation tariff, for every kWh exported to the wider energy market (the “export tariff”). Generators will be guaranteed a market for their exports at a price guaranteed for 20 years. The generator can choose whether to sell exported electricity to the supplier at this guaranteed export tariff, or negotiate a price for exported electricity in the open market.
In addition, small scale generators will benefit because they will have the opportunity to use that electricity on-site to offset some or all of the electricity they would otherwise have had to buy.
The proposed Feed In Tariff arrangements will mean that you can benefit in several ways from any electricity generated on your land, for example:
You install a 300kW wind turbine on your land, and this turbine generates around 680 000kWh of electricity per year*. The farm uses 3 000kWh per annum and this is provided for by the turbine. The remaining 677 000kWh will be exported to the local network. As a result, you receive three strands of benefit:
Revenue for 680 000kWh at the generation tariff;
Avoided cost of 3 000kWh of power for used on the farm; and
Additional revenue from the export tariff for the 677 000kWh sold to the grid.
The current Feed-in Tariff pricing levels (from 1 December 2012 to 31 March 2014) are shown below;
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