New Subsidy Cuts To Renewable Energy Spark Row
Published: 27 Jul 2015
A recent wave of government cuts to renewable energy subsidies has sparked a row with lobbyists and renewable energy groups claiming the government of taking the UK 'back to the dark ages' with more reliance on fossil fuels.
The Department for Energy and Climate Change published several papers earlier this week, which outlined plans to cut subsidies for small-scale solar schemes under its "renewable obligation". The scheme offering financial support for solar plants producing less than five megawatts will end one year earlier than planned.
Another change will see subsidies for wood chip biomass generators cut, which the government claims could save billpayers £500m a year. Separately a consultation was launched which could in future curb 'feed-in-tariffs' which apply to rooftop solar panels.
The Government says the cuts are an attempt to limit the costs falling on household energy bills, which pay for the subsidies under the levy control framework. Official projections suggested the costs of the subsidies would increase above a £7.6bn spending cap to £9.1bn, adding up to £18 to average energy bills.
However, the Financial Times points out the predicted £1.5bn overspend is still within the 20 per cent "headroom" which the Treasury is able to allocate to renewable energy subsidies. Richard Kirkman, UK technical director of French waste and recycling company Veolia, said the cuts would take Britain "back to the dark ages".
The Guardian highlights criticism of the cuts to small solar schemes, which it says could save just 50p a year from energy bills and which the energy industry has claimed are among the most efficient ways for the Government to meet renewable energy targets. One 5MW scheme can produce power for up to 2,500 homes.
But energy secretary Amber Rudd said the Government had to protect consumers and that support already offered had brought down the cost of energy and that the measures would ensure it balances the need to protect consumers, whilst protecting existing investment."
The moves come one month after the Government cut onshore wind farm subsidies, in a decision that has been criticised by Scottish National Party leader Nicola Sturgeon. Scotland accounts for 70 per cent of all onshore wind developments.
Wind farm subsidies axed a year ahead of schedule 18 June
Government funding for onshore wind farms will be abolished a year ahead of schedule, in a controversial move that has angered the industry and environmentalists.
Energy and Climate Change Secretary Amber Rudd said the country now had "enough subsidised projects in the pipeline to meet our renewable energy commitments", the BBC reports. From April next year, windfarms will be excluded from the department's subsidy scheme
Rudd also said the government wanted to encourage technologies to "stand on their own two feet" and not rely on public subsidies. The money taken away from wind farms would be invested in other technologies, but she refused to say what those would be.
Under the new rules, which were included in the party's manifesto commitments, turbines that have already received planning permission will be allowed to go ahead. They will also give local residents – instead of the government – the power to veto proposed wind farms for the first time.
Environmentalists have criticised the move, arguing that onshore wind is the cheapest and most readily available renewable energy in the country, and that the decision will pave the way for more destructive forms of energy production like fracking.
The onshore wind industry also attacked the decision, with trade body Renewable UK calling for an emergency meeting with the energy department to discuss the financial and environmental implications of the move, reportsThe Guardian.
The decision will have a "disproportionate impact" on Scotland, said Fergus Ewing, the Scottish minister for business, energy and tourism and member of the Scottish parliament. He warned Westminster that the decision could be the subject of a judicial review.
Roger Harrabin, the BBC's environment analyst, says some business leaders are "baffled" why ministers would give local people a veto over wind turbines, when they cannot block fracking – "or even a nuclear power station on their doorstep".
The decision to end the subsidies is "pure politics", says The Guardian's Damian Carrington. "Too many Tory voters dislike the look of turbines and their party has delivered for them, whatever the fallout," he says.