BY KATIE - MYGREENPOD, 19 June '15

Government to reduce support for the cheapest large-scale renewable energy option

The Department of Energy and Climate Change (DECC) has announced its intention to close the Renewables Obligation for onshore wind from April 2016 – a decision that Scotland’s Energy Minister said will have a disproportionate impact on Scotland, and that Good Energy’s Juliet Davenport added would ‘undermine growth, investment and jobs’.

‘Renewable technologies need a stable policy framework from which to grow. They do not need another retrospective policy decision, changing goalposts and associated uncertainty. This will serve only to stifle investment, growth, competition and ultimately, the opportunity to make a meaningful low-cost, low-carbon contribution to the UK’s longer term energy security.’

Juliet Davenport OBE, founder and chief executive of Good Energy

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We ‘have enough onshore wind’

In 2014, over £800m of government subsidies helped onshore wind to generate 5% of the UK’s total electricity. According to DECC, the ‘high volume of onshore wind’ either deployed or in the pipeline means ‘the UK is well on the way to meeting its climate change targets’.

‘The Government is committed to meeting objectives on cutting carbon emissions and the UK’s 2020 renewable energy targets. Onshore wind has deployed successfully to-date and is an important part of our energy mix. We now have enough onshore wind in the pipeline, to be subsidised by bill payers through the Renewable Obligation or Contracts for Difference, for onshore wind to play a significant part in meeting our renewable energy commitments.’

Amber Rudd, Secretary of State for Energy and Climate Change

Instability and uncertainty

Juliet Davenport OBE, founder and chief executive of Good Energy, said that today’s announcement is an example of ‘transactional government at its worst’. She added that it will undermine growth, investment and jobs in a sector that’s helping to introduce more competition and new players into the energy market.

‘At such an important time in international climate change negotiations, and just one day after more than 1,000 people descended on Parliament to lobby MPs about climate change, it is very disappointing that the new government is announcing plans to reduce support for the cheapest large-scale renewable energy – onshore wind.

‘By closing the Renewables Obligation early, the government is letting a vocal minority dictate energy policy. We believe the government should be providing solid, stable support for renewable energy which helps tackle the threat of climate change and challenges the dominance of fossil fuels.’

Juliet Davenport OBE, founder and chief executive of Good Energy

Onshore wind developers, including many British companies, have invested millions of pounds in good faith based on the government’s original timetable. This decision will bring further instability and uncertainty to investors and is transactional government at its worst.

A ‘disproportionate impact’

Following recent media coverage of the proposal to cut onshore wind support, the Scottish Government sent letters and made phone calls to the UK Government, and raised the subject in the Scottish Parliament. One of the requests made was to ensure there was a sufficiently flexible grace period covering projects already in the planning system.

This flexibility would ensure companies and communities were not penalised unfairly by the UK Government policy change where they have already invested.

‘The decision by the UK Government to end the Renewables Obligation next year is deeply regrettable and will have a disproportionate impact on Scotland as around 70% of onshore wind projects in the UK planning system are here.

‘This announcement goes further than what had been previously indicated. It is not the scrapping of a ‘new’ subsidy that was promised but a reduction of an existing regime – and one under which companies and communities have already planned investment.’

Fergus Ewing, Scotland’s Energy Minister

An ‘irrational’ decision

Mr Ewing added that the decision will cause ‘huge uncertainty’ for investors across the renewables sector as a whole, and may become the subject of a Judicial Review.

‘The decision will prevent onshore schemes proceeding whilst offshore wind will go ahead despite receiving far more generous subsidies. This, the industry claims, will lead to extra costs for consumers of possibly around £2-3 billion, and must be irrational in that respect.

‘Therefore we have warned the UK Government that the decision, which appears irrational, may well be the subject of a Judicial Review.’

Fergus Ewing, Scotland’s Energy Minister

The cheapest low-carbon option

Considering it’s the cheapest of all low-carbon options and makes a vital contribution towards tackling climate change, Mr Ewing commented that onshore wind ‘should be the last one to be scrapped, curtailed or restricted.’

‘The UK Government has ignored the concerns of businesses and organisations who are integral to the future energy security of both Scotland and the UK, as well as to environmental organisations who recognise the importance of renewable energy in helping reduce emissions. The UK Government have chosen to place at risk a huge investment pipeline, conceived in good faith by developers based on statements from the UK Government.’

Fergus Ewing, Scotland’s Energy Minister

Click here to read Amber Rudd’s full Statement to Parliament.