Answering Energy Source readers’ questions, Chris Huhne said that access to feed-in tariffs could be limited to make sure smaller-scale projects get a fair share.
The scheme we inherited leaves open the prospect of large, industrial-scale, greenfield based solar farms distorting the available funding for domestic and solar and other technologies.
We are monitoring the situation closely and, while we won’t act retrospectively, we stand ready to take measures to limit the access of such schemes to FITs if that is shown to be necessary.
His words will please some small-scale producers, but add an element of uncertainty to the funding system that may deter investment, and goes against previous statements he has made. He promised “greater certainty to investors” when unveiling the electricity market reforms in December.
Huhne also agreed that the current electricity wholesale market is “completely opaque”, saying that he hoped the Ofgem review into the “big six” electricity companies would bring a more transparent market and encourage new entrants into the market.
The scale of investment needed over the coming decades – £200bn in gas and electricity infrastructure by 2020 and much more beyond that – is going to need muchy more than the current “big six” incumbent companies.
Huhne’s full answers will appear on this blog later this morning.