We revealed this morning that Chris Huhne is poised to make steep cuts to the subsidies for household solar panels. This is likely to be very controversial given that this summer the government cut the subsidies (feed-in tariff) for largescale solar “farms”. Details are still being worked out but I wouldn’t be surprised if the current scheme – up to 43p per kilowatt hour – is cut in half or worse; possibly by January. Huhne was asked about the story in the Commons this morning and did not deny it.
This is going to play into the narrative that the coalition’s green credentials are fading fast, as we write in this analysis today – despite headline initiatives such as the Green Investment Bank. Several MPs criticised Huhne today for the collapse of Scotland’s pioneering “carbon capture and storage” project, with Labour’s Lindsay Roy saying it had “descended into farce” and SNP’s Mike Weir calling it “disgraceful“.
Meanwhile DECC has unveiled the details of its separate ROC (renewables obligations certificates) for alternative energy this morning. There are some cuts to the subsidies for certain forms of power taking place in the coming years; but the industry seems broadly happy with the outcome.
(Although Centrica, for example, say wind ROC cuts means they’ll have to review their future plans. The company has warned that the changes mean it will need to “re-examine the economics of the projects we have in our planning pipeline, including our next two offshore wind projects.”)
Gaynor Hartnell, chief executive of the renewable energy association, said she welcomed the “broad thrust” of the proposals.
“There is great relief that this document has finally been published. The delay had put billions of pounds worth of investment on hold. Developers will need to see these new numbers in legislation before they can resume development activity, however.”
There is also a welcome from Friends of the Earth:
After months of uncertainty, this announcement should encourage investors to reap the UK’s huge wind, wave and tidal potential and help wean the nation off its costly fossil fuel addiction.
The details are broadly as we reported them this morning, although DECC has sought to put too positive a light on some of the changes. Onshore wind ROCs will be cut by 10 per cent from 2013. Offshore wind ROCs will still be at their current level in 2015 – but will then be cut by 10 per cent by 2017.
Huhne was in the Commons answering DECC questions this morning, prompting a display of verbiage that prompted the Speaker to ask him to cut down on the “War and Peace” replies.
The energy secretary said that the changes would boost “tidal” power as well as wave power – with the relevant ROCs more than doubling. This is true for “tidal stream” technology; but not for either tidal lagoons or barrages, according to the DECC consultation. These are being cut by 10 per cent in the coming years.
Jim Pickard
Kiran Stacey