mCHP SEG

BEIS introduces Smart Export Guarantee (SEG) for ‘small-scale’ low carbon renewables

The Department for Business, Energy and Industrial Strategy (BEIS) has announced a new Smart Export Guarantee (SEG) to replace the flat rate Feed in Tariff (FIT) payments, remunerating small-scale generators with a price per kilowatt hour for exported electricity to the grid.

These prices will be set by the suppliers (those with more than 250,000 customers) with all tariffs greater than zero and suppliers will not be eligible to recover costs by charging customers at times of negative pricing. There will also be no levelling of costs – suppliers providing a guaranteed tariff will be expected to take administration costs into account when setting their tariffs. Customers are still, of course, able to switch suppliers in a competitive market.

The government has decided that all exports must be metered rather than deemed, essentially limiting the SEG to businesses with a smart meter, which should be in place as the deadline has passed for all commercial properties in the UK to have been offered a smart meter. All Adveco m-CHP installations are metered as a matter of course.

BEIS has dictated that export tariffs should track half-hourly settlement prices, essentially reflecting wider electricity system conditions and demands. BEIS has published five particular tariff models ranging from a basic export metered, non-variable flat rate tariff all the way to an advanced variable tariff, benchmarked against half-hourly market prices. Outside of the tariff structure, contract length and prices are to be determined by individual suppliers

BEIS has also published a draft list of requirements any prospective system would have to fulfil in order to be eligible for the SEG, however, these do not differ greatly from the feed-in tariff. All technologies currently eligible for the FIT payments will still be eligible for the SEG, with an upper capacity limit of 5MW. With regards installation standards. BEIS is proposing that to be eligible for the SEG, m-CHP, Solar PV and wind installations up to and including 50kW in size must use Microgeneration Certification Scheme (MCS) certified equipment fitted by an MCS-registered installer.

The government has stated within the consultation that it is keen to stimulate the deployment of storage technologies, it is seeking industry views on the potential eligibility of storage and co-located renewables with the SEG, such as extending the SEG to battery storage technologies considering their intrinsic value to the grid.

The full consultation document can be read here.