UK Government proposes catastrophic cuts to renewable energy incentives

CleanTechnica

The UK’s Department of Energy and Climate Change has proposed to make calamitous cuts to the country’s renewable energy Feed-in Tariff scheme.

Ever since the re-election of the country’s Conservative Government and the appointment of MP Amber Rudd to the position of Energy and Climate Change Secretary, the UK’s renewable energy industry has been on tenterhooks, as proposal after rumor after proposal placed the industry in ever more increasing jeopardy.

In June, the Department of Energy and Climate Change (DECC) announced that it would be ceasing allowing onshore wind farms access to the country’s main renewable energy subsidy scheme, the Renewables Obligation Scheme (RO). A month later, the DECC revealed that it had not only included more renewable energies into the same category of onshore wind, but that it would be initiating consultations on allowing solar PV of 5 MW or under access to the RO. Additionally, the DECC also initiated a consultation on changing the Feed-in Tariff scheme.

And it was only earlier this month that the Scottish and Welsh Governments teamed up to send a letter to the UK Government, pleading with it to open discussion on small-scale renewable support.

On Tuesday of this week, a coalition of 100 organizations wrote to the UK Prime Minister in an effort to convey their support for small-scale renewable energy electricity ahead of the Feed-in Tariff review. “We are writing to express our strongest support for the continuation of the Feed-in Tariffs (FiT) for renewable energy and ask you to ensure the forthcoming FiT Review supports an ambitious level of local deployment,” the signatories wrote (PDF).

“We are looking to the Prime Minister to take control of energy policy after a summer of hugely damaging policy decisions,” added Leonie Greene, Head of External Affairs at the Solar Trade Association. “There was nothing in his manifesto about rolling back solar power which Government’s own polling shows is supported by over 80% of the British public.”

Government Turns a Deaf Ear

However, all of this seems to have fallen on deaf ears, as the DECC has now proposed a cut to the Feed-in Tariff scheme in a review of the system that is set to end on October 23. According to the “Consultation on a review of the Feed-in Tariffs scheme” published by the DECC Thursday, the proposals include “measures to place policy costs on bills on a sustainable footing, improve bill payer value for money, and limit the effects on consumers who ultimately pay for renewable energy subsidies.”

The cuts to the FiT will affect solar PV, wind, and hydropower projects, and attempt to cap government spending on FiTs to £75 million to £100 million from 2016 to 2018/19. Most noticeably, domestic solar support could be cut by 87%, commercial rooftops by 82%, as well as devastating cuts to onshore wind.

From the report, the proposed generation tariffs are as follows:

DECC-7-570x458

However, the DECC was clear to state that it would close down the scheme entirely in four months’ time if it believes it cannot keep the FiT spending under cap. Specifically:

If cost control measures are not implemented or effective in ensuring that expenditure under the scheme is affordable and sustainable, Government proposes that the only alternative would be to end generation tariffs for new applicants as soon as legislatively possible, which we expect to be January 2016, while keeping the export tariff as a route to market for the renewable electricity they generate.

Any changes that are approved are set to be fast-tracked, “likely to take effect as soon as legislatively possible, which we expect to be January 2016.”

Among the many recommendations made in the review is the decision to close the FiT to any new technologies, as well as closing the generation tariff to new installations from January 2016 onward. Extensions to existing installations will similarly not be able to access the FiT scheme, as well as a revision to generation tariffs.

Immediate Industry Reaction

“What we needed in this Review was a clear vision for how we get to a point where cost effective, small-scale renewables are common-place, with all homes and businesses able to be part of a productive, vibrant low carbon economy,” said RenewableUK’s Deputy Chief Executive, Maf Smith. “This Review is not about how we build that prosperous future but simply about short term politics and accounting.”

“The proposals in the Comprehensive Feed-in Tariff Review are, quite simply, terrible news for homeowners, businesses, communities and those local authorities which have plans in place to develop renewable energy schemes,” said Joss Blamire, Senior Policy Manager at Scottish Renewables. “The levels of reduction in support announced today will severely curtail development of small-scale onshore wind and solar projects and endanger jobs and investments across the country.”

“The cuts could also spell the end for much of the hydro industry, which has enjoyed a recent renaissance but relies more heavily on Government support because of the length of time taken to develop projects and the sector’s high capital costs.”

“Rooftop solar has to been seen as one of the key technologies for a decarbonised future, with consumers and businesses also gaining control over the centralised energy market, this is a phenomenally damaging and short sighted decision which sets back this goal significantly and will lead to higher costs in the medium to long term,” explained James Court, Head of Policy and External Affairs for the Renewable Energy Association.

Source: CleanTechnica. Reproduced with permission.

 

Joshua S. Hill is a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.

Comments

15 responses to “UK Government proposes catastrophic cuts to renewable energy incentives”

  1. phred01 Avatar
    phred01

    Not surprised the UK conservative govn’t is now following in the rabbits foot steps

  2. Mark Roest Avatar
    Mark Roest

    It’s pretty clear who’s in coal’s pocket.

  3. Robin Whitlock Avatar
    Robin Whitlock

    I can’t emphasis enough just how much anger there is in the UK now about this, among people who support solar and were looking to the government to give the industry a break until its ready to break free of subsidies in about five years time. James Murray from Business Green yesterday calculated that this FiT cut will save a mere £6 by 2020, which means, in my opinion and in other peoples opinions too, that this move by the Tories is clearly ideological – an intent to kill the industry basically. And we have another five years of this government left. I am therefore wondering what their next target will be. Given that Amber Rudd said she wanted a solar revolution and then this happens, I am guessing that offshore wind will be the next to suffer the Tory demolition ball. Rudd expressed favour for offshore wind, but given this latest development, I trust neither her nor her incompetent party anymore.

    1. 7073jeremy Avatar
      7073jeremy

      The government has found a new way to incentivise renewables – they want to build a new nuclear power station, Hinckley Point C, which will double the cost of electricity.
      What better incentive to go solar?

      1. Robin Whitlock Avatar
        Robin Whitlock

        That’s a good point. In fact, it will be interesting to see what happens in that direction. Another interesting actually is fracking. Let’s just imagine for a minute that the government manages to push its way past all the opposition to fracking, develops lots of exploratory wells only to find that the CCC was right after all about there not being much shale gas that’s recoverable. The US shale gas industry is already declining and there’s diddly squat chance of the UK duplicating the US experience anyway. So there’s that option out. Next, North Sea oil. That peaked in the 1970’s as far as I am aware, which means it will increasingly be more expensive to get the stuff out. So we’re back to gas again, and as far as I can see gas prices will start to go back up again at some point. Whatever the Tories do, household bills will go up…its not a question of if, but when…to use an old cliche. So you could be right. However, I am wondering, given just how nasty the Tories are showing themselves to be, whether they will engineer it so that alternatives to fossil fuels are basically completely knocked out of the equation, thereby forcing householders to pay high bills for fossil fuels. Having attacked subsidies, lets assume, they finish the job and make it almost impossibly expensive to develop renewables, what could they do next? My guess is they might try to meddle with the planning system, so that even if renewables projects find finance elsewhere without having to depend on subsidies, they will still have to overcome a whole series of planning hurdles. I wouldn’t put it past the Tories to do that, it would be a next step option, just to make sure UK renewables are finished off for good….or so they think. Unfortunately, I am not knowledgeable enough to say for sure whether this line of thinking is plausible or whether its just paranoia on my part, but I just don’t trust them anymore, and that means I am expecting them to get even nastier over the next five years…and beyond.

        1. 7073jeremy Avatar
          7073jeremy

          I entirely agree.
          I too am deeply suspicious of anything the Tories do, funded as they are by big business.
          Obviously their prime concern is to look after their donors, (f**k the consumer!) and what they are doing is a classic government response: If something is too expensive (nuclear) then increase the cost of the alternatives (solar).
          However, I do believe that technology will ultimately win the day regardless of government policy.
          The cost of resource-based energy, coal, gas and oil will only ever increase as the easy-to-get-at resources are depleted.
          On the other hand, the cost of technology-based energy (solar, wind) will continue to get cheaper as technology improves and economies of scale kick in.
          Eventually people will vote with their wallets and choose the cheaper option.
          No doubt the Tories can, and probably will, try to delay it but they cannot stop it.
          The genie, as they say, is well and truly out of the bottle!

          1. Robin Whitlock Avatar
            Robin Whitlock

            I guess that’s the thing we must comfort ourselves with then. It may take a while, but eventually, one day, we will be able to stick two fingers up at George Osborne and say “you’ve just lost the battle, idiot!”

          2. Keith Avatar
            Keith

            There’s alot of good comments about this story on Cleantechnica, some of the guys there have a wealth of informative info.

          3. Robin Whitlock Avatar
            Robin Whitlock

            Sure, I’ve been watching it closely and have written about it twice now on Renewable Energy Magazine (apologies for the plug Giles)

          4. Keith Avatar
            Keith

            Sorry hadn’t realised. I’ll add that site as well to reading list. thx

          5. Robin Whitlock Avatar
            Robin Whitlock

            No problem at all ?

    2. Keith Avatar
      Keith

      It’s almost as if Amber Rudd’s brother works for Fracking industry

      http://www.desmog.uk/2015/07/25/amber-rudd-fails-disclose-brother-top-financial-lobbyist-energy-clients

      Vested interests win again it seems.

  4. Phil Gorman Avatar
    Phil Gorman

    What else would you expect from corporate glove puppets? Huge vested interests in the fossil fuel industries are looking at explaining stranded assets to their shareholders. Rupert doesn’t like renewable energy any more than he likes public broadcasting so he makes common cause with them. The Tories dance to his tunes.

  5. Peter Thomson Avatar
    Peter Thomson

    A majority Conservative government, now showing its true colours – in the pocket of the fossil fuel industry, just like Just like the Abbott government. There was no discussion of renewables in the pre-election run-up, so the government reckon they have a free hand to set whatever policy direction they want.

    1. trackdaze Avatar
      trackdaze

      Yes but at least you don’t have the outright hostility in words and in action.

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