Measures to deal with a projected over-allocation of renewable energy subsidies have been announced today (July 22).
Announcing the changes to bring costs under control, Energy and Climate Change Secretary Amber Rudd said:
“My priorities are clear. We need to keep bills as low as possible for hardworking families and businesses while reducing our emissions in the most cost-effective way.
“Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies. We’re taking action to protect consumers, whilst protecting existing investment”.
The measures announced today include:
- Removing the guaranteed level of subsidy for biomass conversions and co-firing projects for the duration of the Renewable Obligation, known as grandfathering. This could reduce the risk of more allocations under the LCF by around £500m per annum in 2020/21 (i) .
- Launching a consultation on controlling subsidies for solar PV of 5MW and below under the Renewables Obligation (RO). This includes consulting on early closure and removing the guaranteed level of subsidy for the duration of the RO, known as grandfathering.
- A consultation on changes to the preliminary accreditation rules under the Feed-in Tariff (FIT) scheme followed by a wider review of the scheme to drive significant further savings.
The Government will also:
- Set out totals for the LCF beyond 2020, providing a basis for electricity investment into the next decade.
- Set out its plans in the Autumn in respect of future CFD allocation rounds.