On the eve of the important financial statement from the UK Chancellor of the Exchequer on 4 December, and with the political energy debate getting more and more acrimonious, the UK Renewable Energy Association calls on Chancellor George Osborne to “send a positive signal to investors in the green economy by underlining the Government’s commitment to supporting home-grown renewable energy.”
On rising energy bills, REA Chief Executive Dr Nina Skorupska said: “If the funding for green policies can be raised more fairly without undermining investment, then that’s something we would welcome. However, rolling back the support for either renewables or energy efficiency would deliver minimal short term benefit at major long term cost. Over the coming decades, the economic and environmental costs of fossil fuels will continue to rise, while clean renewable energy technologies will get progressively cheaper. Renewable energy is about much more than climate change. It creates jobs in British businesses, it fosters innovation in new industries and it revitalises the regions and the rural economy.”
On the green levies review, Dr Nina Skorupska said: “Politics affects investment. George Osborne can send a clear signal on Thursday that the long-term security of our energy system and our climate is more important than short-term political point-scoring. If energy policy remains a political football right up until the election, this will delay or cancel important energy projects. This in turn will raise the risk of blackouts, and the cost of keeping the lights on and houses warm, when the capacity crunch really begins to bite between 2015 and 2019. Technologies like solar, wind, waste and wood energy are ready to play their part. When the politics settles, they will be able to secure investment to create the jobs and infrastructure that the UK needs.”
Paul Barwell, Chief Executive of the Solar Trade Association, added: “In practice the Government has supported the delivery of nearly half a million solar homes and the UK is now in the top ten global markets for solar power. During this Government the solar industry has brought down costs by nearly 70%, which is unprecedented. Government’s actions are often very positive but they are undermining the renewables industry and their own successes with needlessly negative language that damages confidence. It’s a bizarre own goal. We’d like to hear the Chancellor now champion and celebrate the extraordinary achievements in the solar sector.”
The REA has identified several specific measures where the government could provide a boost to UK renewable energy businesses.
- Ensuring that the new Contracts for Difference (CfDs) for low carbon power generation support a wide range of renewable technologies and generators. Given that CfDs will be implemented shortly before the election, it is critical that this policy achieves cross-party consensus.
- Committing to the published timeline for Zero Carbon Homes.
- Maintaining the 5% VAT rate on energy efficiency and microgeneration equipment.
Concluding, Dr Nina Skorupska said: “Renewable energy is not a cottage industry any more. It is a major contributor to the energy system. Drax’s biomass conversion and the London Array are providing clean power for millions of homes. Meanwhile smaller renewable energy installations are helping homes and businesses cut their heating and electricity costs as well as their carbon emissions. The key question in the Prime Minister’s beloved ‘global race’ is: Which countries will embrace new technology and adapt their economies for twenty-first century challenges, and which will cling on to outdated, polluting and increasingly expensive fossil fuels? It’s time for our political leaders to take a look at the big picture and decide where they stand.”
Interestingly, the analysis of the REA has a lot in common with that of Stephen Tindale published in Energy Post last Friday: it’s the politics that is the problem, not the policies.