By JON FERRIS
The UK renewables sector has suffered from a lack of clarity over whether subsidies are to support innovation, new industries, decarbonisation or to correct for market failure.
As a result, the removal of a scheme can be justified because it has achieved one of these aims, while the other objectives will not be achieved if support is withdrawn.
Wind and solar technologies have matured rapidly over the last decade, with costs falling rapidly, and supply chains have been developed. The CPS premium over EU ETS sets a higher carbon price for fossil fuels. On this basis, a reduction in subsidies would be justified.
However, the current wholesale market structure will not support the cost of inflexible low carbon generation, as evidenced by the increasing prevalence of negative prices at periods of high renewable output.
Read the full POLICY PLATFORM article on Scottish Energy News here: – http://goo.gl/ix34eD