‘It is not the time for different technologies to shout that their technology is better than others’
The UK political landscape has changed so much during the past six months.
The priorities of the new Conservative majority government on how they are going to deliver on their manifesto are increasingly clear when it comes to climate change and renewables:
- Declare leadership and at the same time attack the very industry that can really demonstrate UK leadership.
- Declare themselves pro-business yet take courses of action that may bring to a grinding halt one of the fastest growth areas for jobs and investment.
- Declare themselves desperate to attract the flow of green capital to the UK yet create the most policy uncertainty for the last five years and see the valuable investor community that has been persuaded to spend more than £40bn in those five years, look for the exit door and take the much-needed £50bn to deliver our 2020 carbon targets, with them.
From day one of the new Parliament we, as the REA, have offered to work with the government to clearly make the case for value added, cost-effective investment in renewable energy solutions to deliver the UK’s 2020 ambitions – across electricity, heat, transport and green gas.
We knew that a number of significant reviews of key support instruments such as Feed in Tariff (FiTs) for electricity and Renewable Heat Incentive (RHI) for heat were on the cards. We are also acutely aware of the challenges facing the UK economy and hence pressures on spending on energy, so knew the way forward would be challenging.
Ministers had assured us that they were working up energy strategies to decide how to go forward with support mechanisms in a timely fashion, to be reported in November as part of the comprehensive spending review. Yet the government’s overriding concerns about controlling spend, and a particular focus on DECC’s “over committed” Levy Control Framework (LCF) budget, has seen it make some alarming decisions.
Starting with decisions from the summer Budget followed by consultations on constrainingrenewable energy deployment in the last two weeks, all have caused serious concerns across the industry. Each and every sector is affected, though some will feel the effects sooner than others. Most announcements are linked to renewable electricity and energy efficiency, yet the ferocity and speed cause concerns for the renewable heat sector too and bafflement on what this means for transport and the circular economy agenda.
These announcements included the decision of the Chancellor to part-privatise the Green Investment Bank, remove renewable exemptions from the Climate Change Levy (LECs) (changes that will affect every operational renewable electricity site and our data shows could see a pipeline of over 8GW of schemes re-examined), not to proceed with the zero-carbon Allowable Solutions offsetting scheme and defer long-awaited building regulations for zero carbon homes. Whilst the challenge to onshore wind, even though one of the lowest cost forms of renewable generation, was a political move much trailed in the Tory manifesto, the following announcements to close the Renewables Obligation (RO) from end-March 2016 to sub 5MW solar PV projects, along with the proposed removal of pre-accreditation and grandfathering rights across other technologies such as biomass, really questioned whether the government is determined to cut emissions in the most cost-effective way, as it is precisely the cheapest technologies being targeted.
The REA champions renewable energy overall – working with other specialist organisations and like-minded groups to make the case for the renewable energy economy. Now more than ever we need to work together to create new champions and wider awareness to ensure we hold the government to their strong commitment to tackling climate change, and ensure that the growing renewable energy industry is key to that delivery.
It is not the time for different technologies to shout that their technology is better than others. Limiting budgets does drive competition but we need healthy competition based on ensuring that the rules and regulations of the market are fair and it is clear how the different technologies can play their part now and in the future across all aspects of the energy markets.
A recent illustration was an announcement by Drax, covering its half-year results, in the light of the recent hit to their share price not to mention bottom line, of the removal of LECs. Given the context, Drax needed to explain the important role that baseload biomass power can play in the market to complement more variable technologies such as solar and wind, but this was reported by certain media in such a way as to provoke a “fight” between the different technologies. Fortunately wiser heads have prevailed. The focus should have been on how the government, and I mean Treasury here, has increased its income by £4.5bn by making the Climate Change Levy just a general business energy tax, and no net gain to UK businesses and have undermined investment in projects that not only generate now but those developed to 2020 and beyond.
This summer is important to clearly make the case for renewable energy and climate change not only to Government but to wider society if we truly believe we can influence the new energy strategy and the comprehensive spending review (CSR) on 25November. We need to grow new champions, across parliament and committees that will hold the government to account, other climate change organisations and the public. We will be the Renewables champion.
One of the first examples of this rallying together is the Friends of the Earth call to ensure that small scale community renewables are not undermined and that schools, hospitals and businesses with lots of roof space don’t miss out on installing renewable energy, especially solar PV, as a direct effect of the removal of FiT pre-accreditation and pre-registration for projects under 50kW. We recognise that this is a very different political climate and work to influence key stakeholders must take on a more proactive, “campaign” focused approach. We would urge industry to support this campaign and we will be making our voice heard on a number of related areas.
Dr Nina Skorupska is chief executive of the Renewable Energy Association (REA)