EDF and E.ON, two of the largest offshore wind project developers in the UK have backed the department of energy and climate change’s (DECC) plans to cut support for large-scale solar under the renewable obligation (RO) scheme.
The companies’ responses to the consultation, released after a Freedom of Information request by PV Tech’s sister site Solar Power Portal, show support from the pair for solar’s removal from the RO mechanism. Currently, large-scale solar shares a budget with subsidies for offshore wind and a number of other technologies.
The government proposed in May that from next year, solar projects over 5MW will only be able to apply for support through the new contracts for difference scheme (CfD). This will see solar competing against onshore wind.
“EDF Energy supports measures to control budget spend on rapidly deployable technologies such as large-scale solar PV projects in order to ensure cost control for the government and affordability for consumers,” it said.
The success of solar has led the government to claim that there is a risk the levy control framework (LCF), the capped budget that pays for the RO, could be oversubscribed. In theory, removal of large-scale solar would create more slack in the LCF for offshore wind schemes.
“Ensuring the LCF is effectively managed is important to ensure that some technologies are not unfairly disadvantaged through other technologies deploying rapidly,” said EDF.
EDF has a 900MW offshore wind project registered with the Crown Estate. E.ON claims to be the world’s third largest operator of offshore wind farms.
“We understand the concerns of government about the risks of a technology being deployed at much greater levels than have been budgeted for in the LCF, which is compounded by the more limited options available under the RO for controlling the budget,” E.ON said.
“We would agree in principle with the proposal to close the RO early to solar PV projects above 5MW in scale, and believe this is preferable to either setting capacity caps or instigating a banding review,” E.ON continued.
GDF Suez, which has no UK offshore wind projects and a moderate pipeline of onshore wind projects, said it would prefer to see the RO untouched.
“GDF Suez does not agree with the proposal to close the RO early to solar PV projects above 5MW. Such a move could lead to increased market uncertainty amongst investors in the UK renewable sector, and could deprive the market of a relatively low cost source of proven renewable electricity in the future.”
“The company believes that should government seek greater output from renewable generation to help meet 2020 targets (for example, if other sectors are unable to meet individual targets) then solar may be needed to help fulfil this. Stalling new-build solar through introducing an arbitrary end-date may therefore not be appropriate,” it continued.
Leonie Greene, head of external affairs at the Solar Trade Association (STA), was disappointed with the companies’ stances.
“The fact that these two big utilities support the removal of a level playing field for large-scale solar, even opposing a fair and sensible banding review, speaks volumes. In our view far too much of DECC's policy supports the few existing energy players at the expense of SMEs and new entrants. That was also a concern expressed by Lords from all political parties on CfDs before the [parliamentary] recess,” said Greene.
“It is quite wrong to suggest that suppressing solar saves the public money. Large-scale solar is already the second cheapest renewable and it has the clearest, most proven and sharpest record of cost reduction. Of all low carbon energy technologies solar is the one that can soon be subsidy free, but that can only happen with stable and adequate government support. It is also the technology that best enables new entrants and SME competitors,” added Greene.
Additional reporting by Peter Bennett.