The U.K. proposed to end an assistance program for small-scale
renewable energy projects as part of a drive to cut the costs to
consumers of subsidizing clean technologies. Ministers plan to cap the budget for the assistance and end it for
new entrants after March 2019, according to the proposals outlined
Thursday on the Department of Energy and Climate Change website. If it
isn’t possible to rein in spending, the program of guaranteed
electricity prices, known as feed-in tariffs, may close in January, it
said.
The tariff program “has exceeded all renewable energy deployment
expectations,” the government said. “However, this deployment success
has also come with costs exceeding our projections.” The announcement is a blow to the solar industry, which accounts for
more than four-fifths of all installations under the program, according
to Bloomberg calculations. Energy Secretary Amber Rudd has ended or
reduced a slew of clean energy programs since her Conservative Party won
the general election in May, saying her actions are designed to protect
consumers who pay for the subsidies on gas and power bills.
Thursday’s proposals “would be hugely damaging for the U.K. solar
industry,” said Mike Landy, head of policy at the Solar Trade
Association. “Proposals to suddenly cut tariffs combined with the threat
of closure of the scheme next January will spark a massive market rush.
This is the antithesis of a sensible policy for achieving better public
value for money.”
The Treasury sets annual spending caps on clean-energy assistance
programs that rise from 4.3 billion pounds ($6.7 billion) this tax year
to 7.6 billion pounds in 2020-2021. The government projects actual
spending to reach 9.1 billion pounds by 2021, an overrun that only just
falls inside the 20 percent “headroom” provided to allow for shifting
costs.
Spending Caps
Thursday’s proposals include an annual spending cap on
feed-in-tariffs for new projects through March 2019, when the program
would end, of 75 million pounds to 100 million pounds. It also sets out
new reduced tariff levels for solar panels, small wind turbines and
small hydroelectric programs, and proposes a quarterly “degression”
system to reduce assistance as costs come down and deployment increases.
“If cost-control measures are not implemented or effective in
ensuring that expenditure under the scheme is affordable and
sustainable, government proposes that the only alternative would be to
end generation tariffs for new applicants as soon as legislatively
possible, which we expect to be January 2016,” the department said.
The proposals are subject to a public consultation that ends on Oct. 23.
©2015 Bloomberg News
http://www.renewableenergyworld.com/articles/2015/08/u-k-plans-to-end-aid-to-small-scale-renewables-in-blow-to-solar.html
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