Solar will lead the push towards grid parity and zero subsidies for renewable technologies in the UK, according to Greg Barker, minister for climate change.
Addressing delegates at Solar Media’s Making CfDs Work event in London today, the minister hailed the continued cost reduction of solar and its impressive deployment in the UK.
However, Barker continually stressed that the technology would remain constrained by decreasing budgets as it strove towards grid parity. Commenting on the proposal to remove Renewable Obligation support and switch to auction-based Contracts for Difference, Barker said: “We must spend wisely. The subsidy budget for renewables is generous but finite. Subsidy which, after all, comes directly from the energy bills of hard-pressed consumers.”
He continued: “We need a 21st century policy framework which enables a low-cost transition to competition amongst renewable technologies. And, eventually, drives the renewables sector as a whole to zero subsidy. Zero subsidy that is not a dream – or a threat. Zero subsidy is the clear destination and a goal, that the whole industry should embrace and a race that the solar sector should be determined to win.
“With zero subsidy comes breathtaking scale and extraordinary opportunity. But managing these policy pressures along that journey is not easy.”
Barker urged delegates to view the transition to CfDs with “the sense of optimism and energy you have displayed regularly over the last few years”.
However, a number of delegates expressed frustration over the continued uncertainty over some key policy points within the CfD framework. Namely, industry is very concerned about the budget that will be made available under CfDs to support large, ground-mount solar farms. Barker’s response did little to allay fears, stating that the solar industry should “manage your expectations about the size of support” available. The minister added that given escalating public concerns about the affordability of energy bills “we can’t – and shouldn’t – play fast and loose with public subsidy”.
The other major question mark hanging over the implantation of CfDs is the frequency of the allocation rounds. A number of renewable trade bodies have been vociferously lobbying the Department of Energy and Climate Change (DECC) to introduce, at a minimum, bi-annual allocation rounds. It was a sentiment echoed by a number of delegates, including Lars Weber of Neas Energy who urged the minister to consider quarterly allocation rounds to match the quick timeframe of solar projects. Barker reiterated that the consultation is open and that the government is determined to start “a genuine dialogue” with the industry.
Barker noted that the industry will receive the answer to both these questions when the government publishes its response to the consultation in July.
The minister concluded that the switch to auction-based CfDs ahead of any other European nation and other renewable technologies will put “solar at the forefront of the move to a new renewables revolution”.
He continued: “The solar industry is still fizzing with possibilities for further cost-reduction, innovation and new applications. I believe that solar can make it.
“To coin a phrase, the future is bright. The future is solar.”