The proposed cuts to solar subsidies has attracted the ire
of the renewables industry since they were unveiled by the Department for
Energy and Climate Change (DECC) late last month, but stinging criticism has
poured in from unexpected sources too.
During a House of Lords debate for the draft Energy Bill,
which is hoped to ascend into law next year, a number of lords clashed over the
scant clarifications both within the bill and forthcoming from the DECC with
regards to proposals to close RO support for sub-5MW solar farms a year earlier
than planned.
The debate was ironically held on the same day DECC made the
proposals public, which could be good reason for very few lords present at the
debate having much idea about what was included.
But it did not stop a number of those present from picking
one of the truly contentious issues with the Conservative’s “big reset” of
green subsidies; the potential for them to significantly dent investor
confidence in the UK and convince asset fund managers to take their business
elsewhere, with other markets in Europe such as Spain and Italy continuing to
attract companies such as Bluefield.
Lord Foulkes rounded on the decision by insisting that the
move was “shifting the goalposts” and had “caused investors and potential
investors great dismay”. He also picked up on Cabinet Office minister Matthew
Hancock’s previous claims that support for onshore wind would not be targeted
until such a time that the technology provided 10% of the UK’s energy needs. It
provided just half that figure when the Conservative’s enacted a manifesto
promise to curtail all support for the technology, regardless of it being the
cheapest form of renewable energy in the UK.
“This Bill is harmful. Already £350 million has been spent
on projects that may now not be financially viable. That is a terrible waste of
resources. On top of that, the July Budget scrapped the climate change levy
exemption, which results in a double blow to renewable energy production in the
United Kingdom, and a loss of investor confidence, which puts investment
decisions in renewable energy in doubt,” Foulkes concluded.
Lord Whitty echoed his sentiments, whilst also stating his
belief that subsidies should, over time, diminish as the cost of the technology
falls. “However, that should not precipitate change which will affect decisions
already taken by investors, companies and planners on the basis that rebates
announced only a few months ago by the government would remain in place,” he
said.
But it was perhaps Baroness Liddel of Coatdyke who provided
the most withering commentary of the situation, questioning why the government
wanted to “muck about” with investor confidence.
“I am never sure whether we can refer to strangers in this
Chamber, but I saw the energy minister standing at the bar of the house. She
was looking remarkably well. In her position, I would be losing sleep.
“There are real concerns about security of supply. A major
outage in the United Kingdom could put us in an extremely perilous position,
and that is a strategic issue. The last thing we need at the moment is
uncertainty around energy investment," she said.
Support for the measures within the chamber was hard to
find. Conservative Viscount Ridley urged energy and climate secretary Amber
Rudd to “push ahead urgently” with the proposals, claiming such support had
distorted the market and accelerated the switching of land from food production
to “extremely expensive and unreliable energy”, comments that bear an uncanny
resemblance to those made by Elizabeth Truss and other ministers at the
Department for the Environment, Food and Rural Affairs.
But even Lord Howell, Chancellor George Osborne’s father in
law and long proponent of oil and gas, poured scorn over Conservative energy
policy, particularly in relation to the hugely expensive Hinckley Point C
nuclear development and its impact on the future of the Levy Control Framework.
“By far the biggest obligation, or future burden, on
consumers and households is the Hinkley Point C nuclear project. I am very pro
nuclear and pro its low-carbon contribution but this must be one of the worst
deals ever for British households and British industry,” he said.
His point hammers home perhaps the biggest bugbear with
DECC’s proposals and the reasoning behind them, and that is the apparent
inconsistency behind the message. Rudd and other ministers at DECC have
repeatedly said that the UK cannot afford any more ground-mounted solar or
onshore wind, yet hugely expensive projects such as Hinkley are passed through.
The Levy Control Framework has been stretched to breaking point because 58% of
the budget has been lavished on just eight projects awarded under the
non-competitive FIDeR scheme, effectively ending the chances for further
cost-competitive CfDs.
Speaking during the debate Lord Teverson offered perhaps the
most succinct summary of this. “What concerns me most, very much reflecting
what the noble lord, Lord Whitty, said, is that we seem to have a government
who are ‘1984’ Orwellian in their style, in that what we read is not borne out
by the actions that we see.”
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