Industry has reacted with universal condemnation to news that Government has delayed making a decision on RO banding for renewable technologies thanks to a rift between Coalition MPs over the level of subsidy wind technology should receive.
Industry was expecting the RO banding decision, which will outline the level of support until 2017, to be announced this morning. However, a reported veto from the Deputy Prime Minister, Nick Clegg, has meant that the announcement has been shelved until an agreement can be reached.
Gaynor Hartnell, Chief Executive of the Renewable Energy Association (REA) said: “Those within DECC know that this delay is immensely damaging to the industry and will be seeking to resolve things as rapidly as they can. Developers need certainty and soon.This delay is the most serious yet. It does not bode well for the schedule for electricity market reform, which is far more complex.”
The WWF expressed concerns over investor confidence in the market which “had already been hit once this year by the Government's poor handling of the cuts for solar power.”
Jenny Banks, Energy Policy Officer at WWF-UK explained: “It appears that Treasury are actively seeking to undermine the renewables industry. It’s ironic given this sector is the one shining beacon of potential growth and job creation. Osborne appears to be digging his heels in on an argument about £20 million a year on the level of support for onshore wind. This is dwarfed by the £2.8 billion a year reported to be required by EDF to support new nuclear power which, it has emerged, is more costly than any form of wind generation. Yet we hear nothing from the Treasury about this cost.
“Wind power is the cheapest of the low carbon technologies and by delaying this announcement the government is undermining investment in this key growth industry forcing the UK to rely on more expensive and polluting forms of generation”
Maria McCaffery, Chief Executive of RenewableUK, added: “There is no case for cutting support for onshore wind beyond the 10 percent originally proposed and consulted upon in the Government’s own review. Any further delay in an announcement could have a devastating impact on investor confidence, job creation and the deployment of clean energy. It would be unacceptable if the decision were to be delayed until September – especially as the new banding levels are due to come into force just seven months later, in April 2013. It is imperative that investment and job creation are not harmed in one of our key growth sectors. The industry is demanding clarity at the earliest possible opportunity as a matter of urgency”.
Solar companies have also joined wind companies in expressing concern over today's decision to delay the outcome of the ROC banding review.
Frans van den Heuvel, CEO of Solarcentury said: “We see a very positive future for further utility scale solar plant developments under the RO through the remainder of 2012/2013, but we are concerned that the delay announced today jeopardises future investment. Solar plants can play a major and cost-effective role in the UK’s clean energy future. They are easy to deploy, effective and broadly welcomed by the public and business community alike.”
Nick Boyle, CEO of Lightsource Renewable Energy added: “It has been made very clear over the last few years that solar power is a key component in the UK’s drive towards its renewable energy targets. We hope solar subsidies like FiT and ROC schemes will continue at sensible levels to assist in keeping solar competitive with other energy sources, thus supporting our ultimate goal of reaching grid parity. This would also help to build a stable and profitable industry that will no longer need to rely on government incentives by as early as 2017 if current estimates prove accurate.”
On the other hand, Ed Davey has insisted that the rift between DECC and the Treasury reported in the papers is entirely fictitious during parliamentary questions from the Energy & Climate Change Committee this afternoon. Davey said that, contrary to the purported autumn date, subsidy levels would be announced “as soon as possible”, hopefully before Parliament's summer recess and by September 30 at the latest.
