Opinion
Point of view
“This is entirely a problem of
the Government’s creation”
Industry reacts with shock and anger to announcement of renewable energy subsidy cuts
ndustry leaders and
i campaigners
have
reacted with shock and
anger to Government plans to
overhaul subsidy support for the
renewable energy industry with
a series of cuts and rule changes.
RenewableUK, the trade
association representing the wind,
wave and tidal energy industries,
has expressed dismay at the
announcement by Energy Secretary
Amber Rudd of fresh retrospective
changes in the levels of financial
support for clean energy.
The Minister has announced that
the Government intends to change
the rules governing the Feed-In
Tariff, so that the level of financial
support for medium-scale onshore
wind projects can no longer be
guaranteed in advance. The
renewables industry argues that
this vital measure, known as “preaccreditation”, provided certainty
to projects while they were being
developed, as they could bank on a
certain level of support. Ms
Rudd also announced a wider
review of the Feed-in Tariff
which also supports smallscale renewables.
RenewableUK’s Chief
Executive Maria McCaffery
said: “This announcement is
yet another hand brake turn
on energy policy. It will cause
dismay in Britain’s mediumscale wind energy sector.
Removing certainty will worry
energy investors and can
only increase the cost of
developing renewable projects.
Government knows this, but is
pressing ahead regardless.
“The Feed-in Tariff is a
British success story, but
continual rule changes and
policy swerves will hurt. Local
communities, farmers and
small businesses will be hard
hit by this announcement,
and are being denied their
opportunity to generate their
own clean power and cut
their energy bills.
“The renewable energy industry
is ahead of the Government in its
desire to bring down costs – these
have fallen dramatically and will
continue to plummet. Onshore
wind is already cheaper than new
nuclear power and is on course to
be cheaper than new gas by 2020.
Offshore wind costs have fallen by
11% in the past five years.”
RenewableUK also argues
that the Government is trying
to justify its changes by citing
statistics that over-estimate the
financial support needed for
renewable energy under the Levy
Control Framework. Ministers are
quoting the OBR’s Economic and
Fiscal Outlook, which published
estimates on the costs of all
environmental levies earlier
this month, but did not explain
its methodology.
DECC also published proposals
to reduce Renewables Obligation
support for solar on both roofs
and in solar farms.
The Solar Trade Association’s
Head of External Affairs Leonie
Greene commented: “We recognise
that Government wants to shift the
emphasis to larger solar rooftops,
but we have explained to the
Department that these are just 5%
of the UK market.
“There is a danger that if
Government pulls the rug on solar
farms too early, the market will have
nowhere to go. This could be further
compounded by changes to the
Contracts for Difference auctions.
What we need is a bridging strategy
and we are very keen to work with
DECC to achieve that.”
Charlotte Morton, Anaerobic
Digestion & Bioresources
Association Chief Executive, said:
“FiT pre-accreditation is vital for the
ongoing success of the anaerobic
digestion sector. Even smaller AD
projects are relatively complex, and
take over a year to develop – preaccreditation helps to make the
development risk acceptable.
“Tariffs for AD are already being
reduced, and deployment is falling
as a result – so this change is
unnecessary from a cost control
perspective. With support, AD can
deliver cost effective greenhouse
gas savings – potentially as high as
4% across the economy as a whole
– and grow a UK supply chain which
helps deliver economic productivity
and exports. These proposals put
that potential at risk, preventing
the development of the very
technologies that will lower
consumer bills in the long term.”
Friends of the Earth energy
campaigner Alasdair Cameron
said: “This is entirely a problem of
the Government’s creation. The
Treasury has placed arbitrary limits
on clean power, but solar has
proved too popular and efficient,
and the Government seems to lack
the imagination to adapt.”
Daisy Sands, Greenpeace Head
of Energy campaign, added: “The
timing couldn’t be worse as the
sector is on transition to
subsidy free and is a cheap
form of renewable energy. It
is galling when tax breaks
and subsidies have propped
up the oil, gas and nuclear
industries for decades.”
Juliet Davenport, Chief
Executive of renewable
electricity company Good
Energy, said: “Killing support
for solar means that schools,
farms, homes and indeed
whole communities will find it
much tougher to generate
their own clean, local
electricity and will be reliant
on the same old-fashioned
utility companies that they
should be moving awa