Penalised by GE for providing own power

This led us to investigate the possibility of installing 'solar photovoltaic' (solar PV) panels at our two hotels and we received a couple of prices for installing 20 kilowatt systems on each establishment.

After looking long and hard at the numbers we decided that a payback period of around eight years was acceptable, until we investigated further...

We have now been informed by Guernsey Electricity (state-owned) that should we decide to proceed with the installation we would be subject to a penalty payment for providing our own power, on an annual basis, that actually increases the payback period by more than double. So our good intentions of easing the demands on the grid, helping to save the planet and adding a little to our bottom line have or may be stymied by a monopoly with no vision for the future of renewables on the island.

Would Guernsey Electricity please explain why the UK and other countries are encouraging the use of renewable energy by means of grants, subsidies support and advice, when Guernsey Electricity penalises those concerned businesses from endeavouring to make a change, and please don't give us the excuse, that should the solar or whatever renewable fail to perform, Guernsey Electricity would need to cope with the extra demand ... it already exists. We will simply be making their power demands a little less onerous.

We are blessed on the island with receiving 25% more sunlight than they do in the UK and if the UK recognises the advantages of encouraging this type of technology, why on earth aren't we? The word monopoly keeps rearing its ugly head.

Name and address withheld.

Editor's footnote: Guernsey Electricity Ltd managing director Alan Bates replies:

Thank you for the opportunity to respond to your reader's letter.

Guernsey Electricity is keen to encourage islanders to install their own renewable resources.

However, where customers continue to require Guernsey Electricity to provide a supply to cover situations where their own generation, including renewable resource, is unable to meet their requirements all of the time we apply a standby charge to them.

The reason why this charge exists is to recover the costs of providing the infrastructure to supply electricity to that customer.

To explain this further, when a customer applies for an electricity supply Guernsey Electricity either pays for the majority of or all of the costs to put that supply in, that is, the cost of the network infrastructure needed to supply the electricity needs of the customer.

The costs are very dependent on what the customer asks for in terms of electricity consumption and the nature of the proposed load; the larger the consumption and demand, the higher the costs incurred.

Guernsey Electricity recovers the costs for providing this supply, and maintaining that supply into the future, through its tariffs.

So if at a later point in time, the customer then decides not to use the electricity originally applied for and generates their own electricity in parallel with the network, but wants the supply for when they do not generate (e.g. maintenance or failure of plant), we would be unable to recover the costs associated with that supply.

However we have to maintain a network that is able to supply that customer and there is a cost to providing them with this standby arrangement.

We believe it is unfair that other customers would have to pay extra on their bills to fund another person's service, therefore to make it fair and equitable for all we apply a standby charge.

This recovers the costs via an additional fixed charge and not through overall consumption and should not be viewed as a penalty cost.

The current standby charge applies to customers with renewable installations greater than 25kW capacity. This tends to be for commercial customers as at 25kW, this is more than a domestic customer would normally require on their property.

Guernsey Electricity does recognise that this charge should not act as a disincentive to individuals investing in renewable power, which is why we are currently reviewing the level of the charge and its coverage to ensure it is appropriate.

We are also currently assessing how this charge applies to large photovoltaic installations. We believe that the principle still applies but that the amount of electricity the systems can potentially offset will be less, thus a lower charge may apply in the future.

Other forms of incentive programme for renewable projects, such as feed-in tariffs above our buy-back tariff as seen in other jurisdictions, is certainly something that islanders might be interested in. However this would be a matter for the States of Guernsey's Energy Policy Group to consider and not Guernsey Electricity.

Any incentive schemes would need to balance the cost impact on all electricity customers against the benefits achieved for the few who installed the renewable projects.

If the customer would like to contact us directly on 200700 with regard to their electricity consumption, we will be able to assist further in understanding this compared with other fuels used.