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FITs to Put Renewables on the Grid

By Kolby Hoagland | May 30, 2013

Today, the EIA released a comprehensive list of states and utilities that have feed-in tariff (FIT) programs along with a brief description of each FIT program. Biomass power in countries and regions have greatly benefitted by FIT programs. Ensuring that biomass power is appropriately compensated among FITs is of vital importance to the industry. DataPoints this week looks into FITs, and how they affect the biomass power sector.

For those who might not be familiar with this type of incentive, FITs are guaranteed above market prices for renewable power. Mandated by governments or offered by utilities, FITs are meant to encourage growth of the renewable sources that power the grid, including in most cases biomass powered generation. Germany has the longest running, most successful FITs among countries, but FITs are not limited to federal governments. States and local utilities have taken to employing FITs to "green-up" their generation footprints. By paying a higher per kWhr price to for electricity generated from renewable resources, investment and growth in the renewable power sector is encouraged. In Germany, FITs have helped biomass power grow to represent 6% of total electricity consumed.

Other countries, states and utilities have followed the path laid by Germany. Ontario has the longest running FIT program in North America, culminating in the development of the largest biomass power facility in the continent, Atikokan Generating Station at 211 MW. There are multiple policies to incentives market growth of renewable electricity generation, and FITs are an effective method to encourage development in the industry. Ensuring that biomass power is appropriately compensated among FITs is of vital importance to the industry.

 

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