Tuesday, 30 June 2015

Treasury poised to axe renewables programme

Largely because of the very success of the renewables deployment programme and the insistence by the Treasury of a cap on levies on electricity bills needed to pay for renewable energy, the UK's renewable energy programme is likely to be brought to an effective end by 2018, if not sooner.

Calculations suggest that the budget within the Treasury's 'Levy Control Framework' (LCF) set by the Treasury will soon be spent as onshore wind and solar pv farms are installed faster than expected. Indeed Nigel Cornwall reckons it could have been spent already. See http://www.cornwallenergy.com/cms/data/files/Downloads/Levy-Control-Framework-Cornwall-Energy-analysis.pdf

Of course this spending crisis is one that is manufactured by the Treasury itself. The Treasury decided not to increase the 'carbon levy' on fossil fuel prices last year, thus meaning that its own budget for renewable energy incentives would not support so much renewable energy. In addition to this wholesale power prices have fallen, again meaning that a given amount of incentives will develop less renewable energy. It seems that not only will funding for onshore wind and solar farms be ended, but it is likely also we will hear announcements soon about the tailing off of support for small renewables in the feed-in tariff including domestic solar pv, and one or two token offshore windfarms may be left in the offing if they can achieve much reduced prices.

You would think that the Treasury, cognisant of the fact that energy prices will be much lower anyway, would increase the amount budgeted in the LCF. But no. Rather the Treasury appear to be using the situation to cut back on renewable energy. The Department of Energy and Climate Change is reduced to being little more than a public relations cover for all this in the process.

The UK will fall a long short of its EU target of supplying 15 per cent of its energy through renewables by 2020. This includes all energy, note, just just electricity, and we would need well over 30 per cent of electricity to come from renewables to meet this target. The EU target could only be met if the UK greatly accelerated its deployment of renewables in the next five years, especially in the last 2-3 years. Yet all the signs are that the Treasury will ensure that this is precisely the time when the programme will be more or less shut down.

See some details on http://www.solarpowerportal.co.uk/news/solar_subsidies_could_fall_foul_of_lcf_overspend_report_says_1891#.VZJLSpHdsSs.twitter

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