Green groups are worried that one casualty of the autumn spending review will be the “feed-in tariff” that allows anyone generating alternative energy to sell it back to the grid. It’s not that they believe the coalition would scrap it, given their various commitments to the agenda.
But they fear it could be delayed or watered down by Chris Huhne, Lib Dem energy secretary, under pressure from the Treasury. Ditto the Renewable Heat Incentive (a similar payment for producing alternative heat).
One figure from Friends of the Earth tells me that is is “absurd” for the Treasury to be reviewing the scheme given that it’s financed by public consumers rather than the government.
The counterargument is of course that bills are going up as a result of this – and similar – policies; DECC itself estimates a rise in 33 per cent by 2020 for domestic electricity bills.
Meanwhile Mark Watts, a director at engineering firm Arup, says the “FIT” scheme has made renewables attractive to many companies and public sector bodies for the first time. Investor confidence could be severely damaged if it is reined back or altered.
“The chief benefit of the feed-in tariff and proposed Renewable Heat Incentive is offering investors the certainty of a long-term commercial return – but it will only be possible to judge how much of an incentive it provides after a year or two of operation,” he says. “Investor confidence is likely to be severely damaged if there are any unanticipated changes.”