Industry seeks future clarity after closure of renewables obligation

With the closure of the Renewables Obligation subsidy, the renewables industry has called for greater policy certainty.

The Renewables Obligation was the key policy that supported the UK’s achievement of 25% electricity from renewables

The scheme forced major energy suppliers to develop low-carbon sources of electricity and created a market-based system of trade-able credits

Now the industry has called for policy clarity and stability as electricity generated from renewable sources shrank in 2016 – something that has not happened since before 2005.

The Renewable Energy Association has urged BEIS to reintroduce technologies that are covered by Pot 1 and Pot 3 CfD auctions and to use the forthcoming Industrial Strategy and Clean Growth Plan (formerly Emissions Reduction Plan) to support the construction of new low-carbon electricity generation.

An REA spokesman said: “The Renewables Obligation has been very successful at growing renewable electricity capacity in the UK. Last year around 23 per cent of the UK’s electricity was generated by RO accredited stations, compared to around two per cent supported by the Feed-in Tariff.

“The renewables industry has been able to grow by having this stable, consistent policy mechanism. Without the RO the industry is left with the Contracts for Difference mechanism, while this does support new generation auctions take place at unpredictable intervals and the policy is prone to Government more directly picking winners.

“One of the best characteristics of the RO was the fact you knew when you could build a project under the scheme. By setting out a timetable for future CfD auctions Government could go some way towards addressing some of these concerns, at no extra cost.

“Renewables such as solar and onshore wind are already the cheapest form of electricity in many situations and are tantalisingly close to being able to be built with no direct subsidy, but in the meantime they need support to get over that final hurdle.

“Repeated policy change has resulted in electricity generated from renewables actually shrinking slightly in 2016 despite steady domestic growth in past years and a rapidly evolving global market.

“We cannot afford for this to happen again particularly as we are not on track to meet our Fourth or Fifth Carbon Budgets.”

British Energy Minister Jesse Norman, MP,  commented: “The Renewables Obligation has helped to move the UK from having barely any clean energy 15 years ago to having nearly a quarter of all its electricity coming from renewable technologies.

“We remain fully committed to cleaning up our energy system and our support will continue through the more competitive Contracts for Difference scheme. This is designed to drive down costs and give companies the support and certainty they need to attract investment and get new projects off the ground.”

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