The British Hydropower Association (BHA) has welcomed the announcement that small hydro power is to be included in the fifth Non Fossil Fuel Obligation (NFFO) in the UK. Eric Wilson from BHA said the small hydro power industry was very pleased that John Battle, Minister for Energy and Industry, had ignored the advice of the Director General who had suggested that small hydro should be eliminated from NFFO5.
Giving more details about NFFO5, Battle said that, at 1177MW of capacity, this is the largest obligation since the scheme began in 1990.
‘Government policy is to secure additional generating capacity from renewables so that they can contribute substantially to reducing greenhouse gases, as well as encourage internationally competitive industries across a wide range of new energy sourcing options,’ he said.
Commenting on the 22 small hydro projects which have been included in the obligation, Battle said: ‘Small hydro is proving that NFFO can be a shop window for companies, by demonstrating what can happen internationally. We are very happy that this industry is keen to look to the export market.’ Tidal power had originally been under consideration for this round of NFFO contracts and, responding to criticism about its exclusion, Battle said that the government had not written off wave technology.
‘Tidal power may require more research and development,’ he said. ‘At the moment we are assessing how far this, and other technologies, are advancing and developing.’ Battle also suggested that wave power schemes in Scotland could be included in the third Scottish Renewable Order which is to be announced early in 1999.
The energy minister also noted that the average contract price for electricity in NFFO5 had fallen by 4.35p/kWh when compared with NFFO3. Out of the six different bands of renewable energy sources in NFFO5, the average contract price for power produced by the 9MW of small hydro projects is the second most expensive after small-scale wind energy. However, Eric Wilson is unperturbed. ‘Small hydro is still the cheapest form of energy in the UK in the long term,’ he said. ‘NFFO5 will help to ensure that it stays this way.’ The obligation order under NFFO5 will last for 20 years from 1 December 1998 until 29 November 2018. It will enable regional electricity companies in England and Wales to offer generators premium payments for power for up to 15 years, following a lead-in period of five years to allow for commissioning of the plant. The difference between the NFFO contract price and the price of electricity in the country’s electricity pool is financed through the Fossil Fuel Levy, paid by consumers in their electricity bills.