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What Are Feed in Tariffs?

By: Kathryn Senior PhD - Updated: 8 Mar 2010 | comments*Discuss
Feed In Tariffs Renewable Energy

Feed in tariffs are mentioned quite often in articles and discussions about renewable energy, but what exactly is a feed in tariff? Essentially, this term describes the situation in which a household uses renewable energy, or an energy efficient boiler, to provide for its own power needs. The small energy generation units within the house then produce excess power, which is fed into the national grid to provide part of the power distributed around the country. In return, the government pays for the energy being fed into the system – hence the term feed in tariff.

What is the Point of Feed in Tariffs?

In Germany, where feed in tariffs have been used for several years, this has had a positive effect on the proportion of the domestic energy supply that comes from renewable energy. Like most other European countries, Germany produces well over 10% of its power from local communities who supply renewable energy and gain from feed in tariffs, which then offsets their fuel bills.

Calculations suggest that a typical household in the UK would only need to spend an extra 10p per month to support the government grants necessary to get enough households to put their own renewable energy generation systems in place. At the moment, however, the UK is nearly at the bottom of the list in Europe when it comes to supplying energy to its national grid from renewable power generation. We only produce 5% of our total energy from feed in tariffs and recent decisions by the government seem to suggest that this is not going to increase in the near future. This is felt my many environmentalists to be a great shame – even a very modest increase of 1 per cent would provide the energy equivalent to two nuclear power stations the same size as Sizewell B.

Do Feed in Tariffs Work?

Evidence from the other countries in Europe, such as Germany and the Netherlands suggest that the system is a good one. In the Netherlands, the support of feed in tariffs has resulted in around 40% of the power used in the country coming from the excess power generated by households.

Moving Towards Nuclear Power

Instead of taking the decision to support the installation of wind power and solar panels by individuals and putting its weight behind feed in tariffs, the government seems to have moved closer to accepting nuclear power is the way to go with power generation in the future. It is recognised that nuclear power produces a lower level of carbon emissions, but the issue of nuclear waste makes it a less than ideal solution.

The lack of enthusiasm for feed in tariffs and for allowing local communities to take more control of their power needs also suggests that the government is bowing to pressure from the big power generation companies who, of course, would lose out on profits if we all started to produce our own power and sell it back to the government.

Will Renewable Energy Become a Reality?

Much has been said about relying more on renewable energy sources but, so far in the UK, we have not really made much progress. In the next decade, environmentalists hope that the move towards nuclear power will be diverted to pushing feed in tariffs to raise the input of solar and wind power but also want to see wind power developed on a large scale. Although land based wind farms have proved unpopular – the “I don't want it in my backyard” objections – the arguments against off shore wind farms are less vocal. These may be more expensive to build but there is unlimited space and more wind there. Hydroelectric power generation could also be used to make a bigger contribution to the needs of the national grid.

If we do not expand our use of all these renewable systems, our reliance on fossil fuels is in danger of outlasting supply, leading eventually to having to spend a great deal of money in a short term in an 'emergency' situation to bring renewable energy up to capacity. Many believe that this is a big mistake – if we act faster now, energy generation systems can start to provide electricity from renewables. This will be better in the long term but also in the immediate future as it would reduce our current reliance on oil, with its fluctuating prices and supply problems.

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