In response to the new ‘Rudd Rules’ on renewables subsidies, a Scottish renewables chief has raised concerns over the reducing of support for renewable energy, calling it a step backwards in the UK’s low carbon transition.
This comes after the announcement of the early removal of solar subsidies raising fears of a further reduction or complete withdrawal of onshore wind Feed-In Tariffs.
Govt. publishes Rudd’s new rules to control the cost of renewable energy by reducing subsidies – http://goo.gl/GIC8k7
Paul McCullagh, Chief Executive of Glasgow-based Urban Wind, said: “This continued withdrawal of support for renewable technologies is a complete backwards step in our transition towards a low carbon economy.
“Amber Rudd <UK Energy Minister> has previously stated her commitment to securing a binding decarbonisation agreement at the United Nations Climate Change Summit in Paris later this year.
“However, she has since then continued to withdraw support for onshore wind and solar, undermining an industry that is both one of our cleanest and readily-deployable options and one that enjoys widespread public support. I would like to see her show her colours by truly demonstrating her green credentials.
“While it is true that onshore wind is capable of reaching grid parity with other sources of renewables by 2020, and is even likely to be a cheaper method of generation than competitors by that point, we will not reach that watershed if the rug continues to be pulled out from under our feet.
“The onshore wind industry needs support from the Government to ensure that this crucial technology is able to complete its transition into a leading source of energy in the UK. Onshore wind has already clearly demonstrated the impact it is capable of having, particularly in Scotland, but to continue to withdraw support prematurely puts all of that progress at risk.
“It is crucial the Government demonstrates a commitment to onshore wind and the role it can play in generating plentiful, low-cost and green energy. By providing support in the form of a renewed commitment to the Feed-In Tariff and supporting wind projects in the planning process, they can ensure that onshore wind plays a key role in attaining our carbon reduction commitments and keeping the lights on.”
The DECC plans to reduce Renewables Obligation support for solar on both roofs and in solar farms have also dismayed the Solar Trade Association.
The Renewables Obligation, which currently supports rooftop and solar farm projects between 1MW and 5MW in size, is according to be closed from 1 April 2016, as well as a planned reduction in levels of support for projects currently in the pipeline. Critically, DECC is also proposing to end ‘grandfathering’ within the scheme from now on, the guarantee that a certain level of subsidy will be provided throughout the lifetime of a solar farm once built.
This follows a similar move last year which already excluded solar farms of more than 5MW in size – about 25 acres – from receiving support from the scheme as of 1 April 2015.
An association spokesman commented: “This is damaging for big solar rooftops as well as solar farms, both very cost-effective ways of generating solar power. This contrasts with repeated commitments from Government to boost the commercial solar rooftop market.
“The possible removal going forwards of the guarantee on a set level of support throughout a project’s lifetime once built is a real blow to investor confidence.
“There is a danger 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.
“We also regret this move because solar farms are close to competitiveness with new gas generation and they account for a very small proportion of expenditure on the Renewables Obligation. We’re hearing a lot of big figures from Government, but they should know it is just a few quid more on energy bills to deliver nothing less than a solar power revolution in the UK. We think the British public would support that.
“We’re very close, but we’re not there yet. Support for solar under the Renewables Obligation currently costs just £3 per year on each household bill, and solar on makes up only 6% of the Renewables Obligation budget.”
The grace periods put forward for projects currently in pipeline is similar to that for the previous closure.
The proposal would remove ‘pre-accreditation’ to a fixed tariff level, meaning that complex community and commercial projects that would take longer to complete could have to deal with constantly reducing tariff levels between the start and finish of the project.
The STA spokesman added: “Again, the removal of the ability to pre-accredit a project and lock in at a set level of support, will make it harder to do both commercial rooftop and community solar schemes. We understood that DECC wants to support growth in these areas so we’ll be asking them to think again.”
This follows the Solar Trade Association’s publication last month of its ‘Solar Independence Plan for Britain’ report, a fully costed proposal which sets out how the government can double the amount of solar and get solar as cheap as fossil fuel electricity by 2020, for a modest amount of extra funds.
Nina Skorupska, Chief Executive, Renewable Energy Association – the largest such trade body in the UK – commented:
“The industry is at a critical point as it seeks to reach grid-parity as quickly as possible yet retain the size and scale necessary to become a key contributor to the UK economy.”
“We will be working with Government to ensure that the sector remains of a sufficient size, capable of delivering cheap, low carbon electricity up to 2020 and beyond”
But Rhian Kelly, Business Environment Director for the CBI, said: “The consultation into changes to solar subsidies will give industry the chance to make its case.
“Ensuring consumers’ bills remain affordable is rightly a priority for the Government, but it must work with industry in order to provide consumers with long-term value.
That means getting the policy right from the outset, and having in place a clear and transparent framework to give investors the certainty they need.”