Much has been said and many column inches dedicated to just what the Department for Energy and Climate Change’s proposed changes to renewable energy subsidies will do to the industry itself. But more often than not the secondary victims – those outside of the industry and, as a result, overlooked – will be hit just as hard.
When DECC made the announcements on 22 July, the industry went in to overdrive to ready its response. Given just four weeks and no impact assessment on which to formulate a response, you can forgive the various trade associations and companies involved in the sector for focusing almost entirely on defending themselves from the cuts.
But it wasn’t until Scottish energy minister Fergus Ewing and Welsh natural resource minister Carl Sargeant addressed Amber Rudd personally that the fate of community energy programmes, those established not just to produce renewable energy for local residents but to financially support important community projects, was referenced.
Ewing spoke of the community-owned wind farm on the Isle of Lewis which, at 9MW, is the largest community-owned renewable energy project in Scotland. On top of its obvious benefits as a producer of renewable energy, it generates approximately £1 million each year for the Isle of Lewis economy. Residents of the Isle decide how best to allocate this funding each year, and the project stands to have a direct influence in improving the quality of life of local residents throughout its lifetime.
Without Renewables Obligation support the profitability of future projects such as this would be significantly capped, and without pre-accreditation safeguarding a feed-in tariff level there is no certainty of return to tempt institutional investors in. Ewing said the future of similar projects occurring in Scotland and across the UK was now under threat, something he said would be “tragic” for future communities.
Sargeant, who referenced the Abergwyngregyn hydro scheme which has brought “significant” economic and social benefits to its local communities, said the changes would make it much harder to get similar projects off the ground in the future.
Then there’s the case of local councils, many of whom had been exploring the potential of rolling out solar PV installations on their council housing estates both as a means of generating income and to help residents suffering from fuel poverty, caused by energy prices that have continued to increase in recent years.
Doncaster City Council last week detailed proposals to install solar on as many as 6,000 homes after a successful pilot scheme. An initial tranche of 279 homes is to receive solar by January 2016 at the latest on the back of a £1.2 million investment of the council’s own money. The expected outlay will top £1.5 million over the course of the installations’ lifetime, but those systems will generate revenue of around £2.8 million over 20 years and save each household an average of £150 on their energy bills each year.
Changes to the feed-in tariff, widely expected to emerge from the comprehensive review due to start imminently, would place a more significant roll-out at risk. Speaking to Solar Power Portal earlier this week, the council’s energy manager Richard Smith said any significant change would impact how many houses would receive solar and even if the project was feasible in the future. He said the council continued to work on identifying at what price per kilowatt hour it would have to consider winding the project up.
Cases such as these are unlikely to convince those in government that the Levy Control Framework should be extended, and in its defence DECC is on the record as confirming its intent to do what it can for community energy programmes in the future. But to sacrifice schemes that would have such a considerable impact on the value of life for the UK’s poorest households for the sake of political point scoring seems cruel in the extreme.