French hill farmers and British feed in tariffs
On my way back from the European Wind Energy Conference in Marseille a few weeks ago I called in to see an old neighbour of mine who runs a farm in the Pyrenees. After convincing the sheepdogs that they knew me (these are the genuine sheep guard dog variety) I found him and his daughter with their flock of a few hundred sheep who were busy lambing. They thrust a litre Coke bottle full of warm goats milk in my hands and we got on with feeding the lambs. They keep a few dozen goats and use the spare milk for the rejected lambs or the runts.
After an hour of this we went out into the yard and he gesticulated at the conifers behind the barns and told me he was about to cut them down. His explanation was that he had just leased out the south facing roofs of all his barns to a solar company. He is at about a 1000m altitude and his roofs have no obstructions on them and face nicely south at 30 degrees slope which makes them almost as perfect as one can get for solar. The leasing company is going to pay him a annual rent provided he files all the paperwork and keeps the roofs clean and unshaded – hence no pine needles. The leasing company is going to sell the power back to the grid under the new French feed-in-tariff laws and then they are going to securitise the future energy sales in the financial markets. The feed-in-tariff in France is about 40 cents/kWh or so (I forget the exact number). Feed in tariffs are one of the types of microgeneration tariffs I have described in previous blog entries.
Since electricity in France usually costs 10-15 cents/kWh someone is subsidising this deal. Basically that someone is the average person in France who is subsidising the few who have the opportunity to put solar on their roofs. These are normally affluent middle class people along with quite a few farmers with handy roofs, most of whom are pretty poor in the area I know (these are not the grain baron variety). The same thing has happened in Germany and Spain. So most (poor) folk are subsidising a few (rich) folk make more money.
And it gets even more eye watering – because of the way any guaranteed income stream can be securitised the finance community get mega rich setting up all these deals. Don’t get any silly ideas that there will be serious job creation going on in France because all the factories churning out these solar panels already exist. They’re all in Germany, Spain, California, and Japan who were the first to put in feed-in tariffs and who have spare capacity, oh and China. So there has been a real first-mover advantage for those countries who got their industry moving and from here on in poor local taxpayers subsidise middle class property owners and rich financiers.
Actually in France they have ways of making sure that some solar factories will get built to provide some local employment. The same feed-in-tariff legislation will be introduced in the UK next year (2010). The difference in the UK is that the UK is so far behind in the solar manufacturing game, and has governments who couldn’t organise building a factory if their salaries depended on it (which they do, but don’t realise) and so there will be precious few solar jobs created apart from the first flush of installation work.
However in the UK we do have a small wind turbine industry. If we were German we would introduce a feed-in-tariff for wind turbines but not for solar. In fact that’s why the Germans introduced a feed-in-tariff for solar (which they make) but not for small wind turbines (which they don't make). After all they had no intention of playing fair – nor did the Spanish, or the Japanese. Common sense would dictate that we would set a modest feed-in-tariff. Just enough to encourage sensible growth in the domestic small wind industry without fostering the sort of solar roof-leasing by imported solar I’ve described above, and certainly not enough to set off a boom and bust boondoggle. And if we do decide to be generous and give some tariff to solar then surely we would be sensible and set it at a lower level than for small wind.
It would be nice to think this wouldn’t it ? So obviously sensible to build up British manufacturing industry ? Let’s see.
A couple of weeks ago we got a call from a company called Datamonitor (http://www.datamonitor.com/) who were reading our blog entries about microgeneration tariffs and wondering if they could quote it. They rang back later to say that they’ve decided to redo the work from scratch which I think is a backhanded way of saying that they intend to sell the report they are going to write. When folk like Datamonitor start covering the tariff space that indicates they think there’s money to be made.
It's going to be fun the next few years isn't it.
After an hour of this we went out into the yard and he gesticulated at the conifers behind the barns and told me he was about to cut them down. His explanation was that he had just leased out the south facing roofs of all his barns to a solar company. He is at about a 1000m altitude and his roofs have no obstructions on them and face nicely south at 30 degrees slope which makes them almost as perfect as one can get for solar. The leasing company is going to pay him a annual rent provided he files all the paperwork and keeps the roofs clean and unshaded – hence no pine needles. The leasing company is going to sell the power back to the grid under the new French feed-in-tariff laws and then they are going to securitise the future energy sales in the financial markets. The feed-in-tariff in France is about 40 cents/kWh or so (I forget the exact number). Feed in tariffs are one of the types of microgeneration tariffs I have described in previous blog entries.
Since electricity in France usually costs 10-15 cents/kWh someone is subsidising this deal. Basically that someone is the average person in France who is subsidising the few who have the opportunity to put solar on their roofs. These are normally affluent middle class people along with quite a few farmers with handy roofs, most of whom are pretty poor in the area I know (these are not the grain baron variety). The same thing has happened in Germany and Spain. So most (poor) folk are subsidising a few (rich) folk make more money.
And it gets even more eye watering – because of the way any guaranteed income stream can be securitised the finance community get mega rich setting up all these deals. Don’t get any silly ideas that there will be serious job creation going on in France because all the factories churning out these solar panels already exist. They’re all in Germany, Spain, California, and Japan who were the first to put in feed-in tariffs and who have spare capacity, oh and China. So there has been a real first-mover advantage for those countries who got their industry moving and from here on in poor local taxpayers subsidise middle class property owners and rich financiers.
Actually in France they have ways of making sure that some solar factories will get built to provide some local employment. The same feed-in-tariff legislation will be introduced in the UK next year (2010). The difference in the UK is that the UK is so far behind in the solar manufacturing game, and has governments who couldn’t organise building a factory if their salaries depended on it (which they do, but don’t realise) and so there will be precious few solar jobs created apart from the first flush of installation work.
However in the UK we do have a small wind turbine industry. If we were German we would introduce a feed-in-tariff for wind turbines but not for solar. In fact that’s why the Germans introduced a feed-in-tariff for solar (which they make) but not for small wind turbines (which they don't make). After all they had no intention of playing fair – nor did the Spanish, or the Japanese. Common sense would dictate that we would set a modest feed-in-tariff. Just enough to encourage sensible growth in the domestic small wind industry without fostering the sort of solar roof-leasing by imported solar I’ve described above, and certainly not enough to set off a boom and bust boondoggle. And if we do decide to be generous and give some tariff to solar then surely we would be sensible and set it at a lower level than for small wind.
It would be nice to think this wouldn’t it ? So obviously sensible to build up British manufacturing industry ? Let’s see.
A couple of weeks ago we got a call from a company called Datamonitor (http://www.datamonitor.com/) who were reading our blog entries about microgeneration tariffs and wondering if they could quote it. They rang back later to say that they’ve decided to redo the work from scratch which I think is a backhanded way of saying that they intend to sell the report they are going to write. When folk like Datamonitor start covering the tariff space that indicates they think there’s money to be made.
It's going to be fun the next few years isn't it.
Labels: feed in tariffs, IEC 61400-2 small wind turbines edition 3 (CDV), solar feed in tariff, wind feed in tariff; microgeneration tariff
posted by David Sharman at 9:13 pm
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