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Author Topic: Who actually pays the FIT?  (Read 8172 times)
wookey
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« Reply #30 on: November 01, 2009, 01:05:45 AM »

Largely those in fuel poverty, who can't afford to invest in insulation or PV arrays and are therefore left burning Gas paying a premium for the privilege! Not least the large number of those over the last decade who qualified, by means testing, to have warmfront grant to improve heating/DHW ...... with ..... gas boilers ..... who now find the governments arranging for them to pay a premium on their gas to be passed on to those who ........ can afford a PV installation!

Just read a very interesting article on the economics of wind, showing that in fact the 'FIT supplement' that the populace pay to generators is in fact negative in Denmark and Germany. This is because wind power has tiny marginal costs (all the costs are up-front), which means that it gets used first when available, and that pushes down the spot price (quite significantly at high-demand times). This has two effects: 1) by pushing down daytime prices it brings down consumer electricity costs, 2) Installing more wind soon makes the prices drop below the price at which the farms pay for themselves (confusingly - the point being that the overall cost is _much_ higher than the marginal cost).

Introducing a FIT solves the problem of more wind making wind uneconomic, by guaranteeing a stable minimum price. But the overall price reduction still applies (more so, because now it's worth installing more capacity) so in fact consumers get cheaper power and don't end up paying extra via the FITs mechanism at all.

Neat eh? Full details here: http://europe.theoildrum.com/node/5354
I learnt a lot reading that - very informative.
« Last Edit: November 01, 2009, 12:52:54 PM by wookey » Logged

Wookey
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« Reply #31 on: November 01, 2009, 09:00:25 AM »

Wookey
thanks a very interesting link.
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Gestis Censere. 40x47mm DHW with TDC3. 3kW ASHP, 9kW GSHP, 3kW Navitron PV with Platinum 3100S GTI, 6.5kW WBS, 5 chickens. FMY 2009.
Ted
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« Reply #32 on: November 01, 2009, 11:11:40 AM »

Very good article.  But lower costs for the 'consumer' in this context means the electricity companies - who purchase the generated power in order to re-sell to their customers. Whether any of the savings actually get passed on to the end-consumer is another matter. And we should be able to rely on OFGEM to oversee that on our behalf. 

 flyingpig
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