Renewable matters 

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Democratising wind creating lasting value for communities: Renewables UK November 2013.

How UK onshore renewables has lagged behind european competitors due to lower levels of community involvement .

How community yield EIS companies can deliver value for both developers and the communities that host projects.

Download the talk given to UKrenewables 2013 annual conference in birmingham :

RUK2013windtalk .pdf RUK2013windtalk .pdf
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Climatechangematters limited is pleased to support

Communities for renewables CIC (CfR) 

CfR provides at risk consultancy services to local energy cooperatives seeking to develop renewable electricity and renewable heat projects in their locality with the aim of facilitating local ownership, local income generation and where possible local energy supply arrangements.It also helps developers engaging with community development. 
 

CfR is one of the first CIC's to be granted SEIS status: see

http://www.cfrcic.co.uk/invest-in-cfr/ 

and download CfR's submission with climatechangematters limited to the Energy and Climate Change Committee on local energy.

 Renewables to 2020: its not just the shale gas challenge

 In mature economies full blooded growth has yet to replace recession. Even allowing for pre-credit largesse , in the West normal financing has not been resumed.

-  President Obama, in his inaugural address, did not lip sync his commitment to deal with the challenges posed by climate change, but he also said,

 “The path toward sustainable energy sources will be long and sometimes difficult."

Read Jonathan Johns guest lead article from EY's CAI issue 36 which posits an  investment  framework for renewables to 2020 , discusses the impact of tthe shale gas challenge and highlights the three tier energy market that is emerging : in North America, Europe and Asia (with other fast growth markets). 

itsnotjusttheshalegaschallenge.pdf itsnotjusttheshalegaschallenge.pdf
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Are we doing enough to keep the lights on ? Aug 2012

Many countries will miss their targets leaving economies vulnerable to fossil fuel price shocks and localised power blackouts: see the analysis.

2020 targets.pdf 2020 targets.pdf
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See the  results 

climatechangemattersrefflondon2012.pdf climatechangemattersrefflondon2012.pdf
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Read our views in-the-press.php 

Related sites :

http://www.lowcarbonmatters.biz

Content relevant to high energy users , businesses subject to the CRC and communities seeking to transition to the low carbon economy.


The 2014 Budget and renewables

1. The carbon floor price fixed at £18 per mwh  dampens the upwards trend of wholesale electricity prices

reducing project irrs - particularly in the long term for those developers who factored in its benefits in their power curves . Early cfd auctions (already announced ) also produce downward price pressures: as does the possibility that the RO itself may be adjusted when early tenders come in . The new measures increase the geographic swing of wind to the north and west and solar to the south ie to best resource . 

Capital costs are also declining partly due to the  strength of the pound relative to the euro dollar . Capacity surpluses in solar are easing due to the strength of the Japanese and Chinese markets. 

In the short to medium term generation. capacity constraints may help wholesale prices whilst gas prices will be critical : not many players are factoring a US style fracking  boom in the UK . 

2. The scrapping of EIS VCT and SEIS relief for  RO and RHI projects affects tax based funding routes in the commercial sector 

The budget announcement is likely to lead to a race to put on commercial EIS funded capacity before royal assent of the Finance Act particularly in solar.

Logically CFD fit  projects would also be excluded from relief, but this is not currently proposed although draft Finance Act  wording has yet to be issued . Quoted  infrastructure funds which are not tax reliant  in any event continue to raise significant amounts for the purchase of secondary market projects ( or sponsor related  pipelines) .


3. Welcome  support remains to encourage community projects but its not all good news.

The Budget does not affect  EIS and SEIS relief  for qualifying community Fit projects .On published drafting they also  qualify for the newly introduced  social investment tax relief (SITR)  for RHI and RO projects (at eis equivalent rates) . However  there is a catch as entities qualifying for SITR have a limit on tax based funds invested of 344,000 euros over 3 years (and subject to complex state aid rules)  meaning only small RHI schemes are likely to be supported.

The effect of current legislative drafts is that qualifying organisations , usually coops, will need to manage both strands  of legislation i.e. social investment relief and enterprise investment relief -if they have a range of projects e.g. pv panels and biomass boilers. 

It also means that in practice RO projects will  not be supported,

For RHI projects there is the prospect of tax relief of  unsecured debt as well as equity investment . For 2014 small electricity assets are  restricted to equity investment under EIS.  unless  proposals to allow convertible debt are implemented (after a consultation). 

Community groups may wish to see the EIS exemption for Fit schemes extended to both RHI and RO projects so that they don't have to rely on SITR .

The 10 mgw community Fit remains a proposal that is eagerly awaited with some concerns that recent state aid pronouncements mean that it will remain at 5mgw. 

4. Longer term the change in pension fund legislation could increase the market for infrastructure funds 

if retirees draw down and seek yield based investments. It will however reduce the pot of pension funds seeking to invest in the sector to match annuity programmes. 

For further information contact : Jonathan Johns

mailto:info@climatechangematters.biz

http://www.climatechangematters.biz

telephone: 07831486987 country code 44

landline/fax 01392496864

Climatechangematters offices are powered by solar pv  solar thermal and biomass heating (from sustainable local sources).

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Climatechangematters invests its time to assist in major industry campaigns
 

Sign  the petition for recycling of green taxes to benefit the fuel poor ahttp://www.energybillrevolution.org

Climatechangematters.supports Transformuk in its campaign for an effective Greeninvestment Bank http://www.transformuk.org.

Climatechangematters supported the  successful campaign to restore EIS for commmunity investment vehicles.