UK government delays decision on renewables subsidy levels

Posted at July 21, 2012 » By : » Categories : News » Comments Off on UK government delays decision on renewables subsidy levels

The UK government has delayed its decision yet again on the levels of subsidies that renewable generators receive.

The Department of Energy and Climate Change (DECC) yesterday confirmed that subsidy levels under the Renewable Obligation Certificates (ROC) Banding schene, which had been expected before the end of this Parliamentary session, will not be announced until later in the year.

The government has to announce the new subsidy levels before the end of September and Energy Secretary Ed Davey is reported as promising the results “as soon as possible”.

Speculation over the results of the ROC Banding review, which was originally supposed to be announced in the spring, has been rife with major cuts predicted for wind and solar generators.

The Renewable Energy Association (REA) called the delay “immensely damaging” for the industry and called on the government to resolve the situation as soon as possible.

“Developers need certainty and soon,” says chief executive Gaynor Hartnell. “This delay is the most serious yet. It does not bode well for the schedule for electricity market reform, which is far more complex.”

RenewableUK, the trade association representing the wind, wave and tidal energy industries has also called on the government to make a decision on support subsidies as soon as possible.

“The economic evidence is crystal clear – it shows that there is no case for cutting support for onshore wind beyond the 10% originally proposed and consulted upon in the government’s own review,” commented chief executive Maria McCaffery. “Any further delay in an announcement could have a devastating impact on investor confidence, job creation and the deployment of clean energy.”

She says it will be “unacceptable” to delay the decision until September, as the rates will come into force just seven months later in April 2013.

Leading solar power developers Solarcentury and Lightsource Renewable Energy Ltd have added their concern to the delay over the review.

“We see a very positive future for further utility scale solar plant developments under the RO through the remainder of 2012/2013, but we are concerned that the delay announced today jeopardises future investment,” says Solarcentury CEO Frans van den Heuvel.

Both van den Heuvel and Nick Boyle, CEO of Lightsource Renewable Energy, believe that solar power could be a key part of the UK’s renewable energy targets, but only if subsidies like the feed-in tariff and ROCs continue at “sensible” levels.

“This would help to build a stable and profitable industry that will no longer need to rely on government incentives by as early as 2017 if current estimates prove accurate,” adds Boyle.

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Related stories:
UK reports 36% growth in renewables capacity in 12 months (2-Jul)
UK survey reveals strong public support for renewables (10-Jul)
Nine out of ten want to see Britain rely more on renewable (23-Apr)
UK politicians out of step with public over wind farms (20-Apr)

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