Fit Agreement Definition

Feed-in tariffs (FIT) are fixed electricity prices paid to renewable energy producers (EE) for each unit of energy produced and fed into the electricity grid. Fit payment is guaranteed for a given period, often linked to the economic life of the EE project (usually between 15 and 25 years). Another possibility is to calculate a fixed maximum of hours of full load of electricity production in RES, for which the FIT is paid. FIT is usually paid by electricity system, system or market operators, often under electricity deduction agreements (ECAAs). FITs usually offer a guaranteed sales contract for long periods (15-25 years). [1] [10] The trade agreement proposed by the Transatlantic Trade and Investment Partnership (TTIP) now risks reversing buy-back tariff systems across the European Union. The draft energy chapter of TTIP, which was forwarded to The Guardian in July 2016, states that energy system operators allow “access to gas and electricity under reasonable, transparent and non-discriminatory commercial conditions, including between types of energy”. [73] This would open up the redemption remuneration systems to commercial challenges, including those used by Germany. Green MEP Claude Turmes said: “These [TTIP] proposals are totally unacceptable. They would sabotage the ability of EU lawmakers to prioritise renewable energy and energy efficiency over unsustainable fossil fuels. It is an attempt to undermine democracy in Europe. [73] Feed-in tariffs are considered necessary to promote renewable energy sources from the earliest stages of their development, when production is often not economically viable. The remuneration for the buy-back usually includes long-term agreements and prices linked to the production costs of the energy concerned.

Long-term contracts and guaranteed prices protect producers from some of the risks associated with renewable energy production and encourage investment and development that might not otherwise take place. You must apply to your electricity distributor to obtain the redemption remuneration. If you sign an agreement with your electricity distributor, you must be informed of the amount you pay for each kW/h exported. FIT`s main challenge was to define remuneration levels that are not too low to attract investment, nor too high to avoid windfall profits and market developments that lead to escalating costs of the RES support scheme or technical problems related to the electricity system.