THE Department for Business, Energy & Industrial Strategy has launched a consultation asking for responses on the introduction of a mandatory supplier-led route to market for small-scale low-carbon generation: the Smart Export Guarantee (SEG).
The consultation reflects extensive work by the Solar Trade Association (STA), working with innovative suppliers and battery storage providers, on the current barriers to market offers for the small volumes of power coming from new solar homes.
Route to market
Including small-scale solar photovoltaics and other electricity-generating renewables, the consultation considers future arrangements which, the government says, aim to provide a route to market which supports small-scale low carbon generation of electricity, market innovation and lowering of costs for consumers.
The consultation also considers ideas for promoting the efficient use of electricity through price signals, for instance promoting export when the grid is experiencing high demand.
Under the Smart Export Guarantee (SEG), government would legislate for suppliers to pay small-scale low-carbon generators for the electricity they export to the grid.
STA CEO Chris Hewett said: “We give these proposals a cautious welcome. We are very pleased the Government is unequivocal: small generators will be compensated for the power they contribute to the system, but the issue remains providing remuneration at a fair market rate. We are particularly pleased to see a clear requirement to meet MCS standards for participation in the scheme, which means safeguards for consumers will be retained.
“Positively, the government again identifies the System Sell Price as accurately reflecting the market value of power spilled to the grid. However, the consultation acknowledges many of the market barriers we have raised with Government and the associated costs. Our worry is that these may impede the ability of suppliers to offer fair and meaningful rates, even though they may wish to. Customers are freely able to switch suppliers in a competitive market, so where these costs fall remains vital to developing meaningful offers.
“Nevertheless, this is a good basis for consultation. The devil really is in the detail here so we very much hope that government will listen very carefully to the responses.”
The evidence gathered from this consultation will allow government to decide on whether, and how, to proceed with the SEG.
Responses are invited from consumers, trade associations, small-scale low-carbon electric generators, suppliers, aggregators and other interested parties.