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The UK Department of Energy and Climate Change (DECC) has set out new proposals for the level of support for large-scale renewable developments between 2013 and 2017, reports Solar Power Portal.
The Renewables Obligation is the main support scheme for renewable electricity projects in the UK. It places an obligation on UK suppliers of electricity to source an increasing proportion of their electricity from renewable sources. The department has decided that support for solar PV will stay at two renewable obligation certificates (ROC) with no immediate reduction. However, DECC states that due to “a dramatic fall in costs” there will be a further consultation this year on reduced support levels for the technology.
DECC are also claimed to be considering plans to close the band to new PV projects at or below 5MW from 2013, subject to consultation.
Edward Davey, secretary of state for energy and climate change, said, “The support we’re setting out today will unlock investment decisions, help ensure that rapid growth in renewable energy continues and shows the key role of renewables for our energy security.
“Because value for money is vital, we will bring forward more renewable electricity while reducing the impact on consumer bills between 2013 and 2015, saving £6 off household energy bills next year and £5 the year after.”
Solar Power Portal states that the UK solar industry has reacted angrily to the prospect of yet another consultation and the level of uncertainty that it brings with it. Seb Berry, Head of Public Affairs for Solarcentury commented, "The last thing this industry needs is yet another consultation on support levels. Ministers keep promising this industry "TLC" - transparency, longevity and certainty - but today's decision does the very opposite.
“The consultation response confirms that PV is already a more cost-effective technology than offshore wind and yet investors in the cheaper technology are now in limbo land awaiting yet another consultation and unable to commit to projects beyond March 2013."
Berry added, “Government's proposal that the ROC level for large-scale PV should be slashed to that of the equivalent feed-in tariff rate from April 2013 suggests that DECC is not serious about its 22GWp ‘ambition.’ The reduced FIT rates for large-scale PV have delivered precisely zero installations in the whole of May and June and we see no prospect of the FIT rate for "large-scale" PV being attractive to investors in eight months time."
Martin Wright, chairman of the Renewable Energy Association said, “We are concerned about the further reviews facing many technologies, which is likely to inhibit investment. Business confidence is essential to realise the vast potential of this industry, in which the UK still lags behind the rest of the world.
Companies will not invest without stable government policy delivered in a timely manner. At such a critical time for the economy, this country cannot afford any further political wrangling that puts at risk future investment and job creation.
“The chancellor’s recent letter to the energy secretary showed a serious misalignment between the attitude of treasury and other government departments charged with delivering a growing, low carbon economy. The treasury appears to be frustrating the creation of a comprehensive energy policy for short-term economic and political gain. It is time energy policy properly reflected the long-term interests of the nation.”
Gaynor Hartnell, CEO of the REA added: “The proposal to remove solar PV, and other FiT technologies, from the RO under 5MW is very worrying. We expressed our concern about this to the secretary of state in early June.”
The government believes that the announced changes will help provide the necessary platform to attract between £20 billion and £25 billion new investment in the economy between 2013 and 2017. By 2017, it is hoped that the revised package could help deliver as much as 79TWh of renewable electricity every year. A move that would account for 74% of the 108TWh target required to meet the UK’s 2020 renewable energy target.