UK Electricity Reform Proposals Get Concerned Response

UK electricity reform proposals to abolish the Renewables Obligation in place of a new Feed in Tariff have been met with a concerned response.

The new UK electricity reform ‘Feed in Tariff with Contract for Difference’ (FIT CFD) announced last week is set to replace the Renewables Obligation (RO) for renewable energy projects built after 2017. More costly renewable energy technologies such as offshore wind energy are expected to receive a premium rate.

The government is also proposing fast- tracking the next adjustment to the RO to apply from Spring 2013. The announcements have caused unease in the UK renewables sector, although the market reform changes will not necessarily apply to Scotland and Northern Ireland.

Trade association RenewableUK previously lobbied the government to retain the RO. The association is now warning that changing parts of the existing model which are working could hit investor confidence.

Dr. Gordon Edge, RenewableUK Director of Policy, said:

“Major investment is required in the UK’s electricity sector, both to replace generating capacity that is reaching the end of its life and to meet our targets for renewables and carbon emission reductions. In the long term, the cost of doing nothing to the country and to consumers will be much greater than the cost of low carbon measures.

“However, we must also bear in mind that the Renewables Obligation has turned the UK into an offshore wind powerhouse, and brought forward 20,000 megawatts of applications onshore. We shouldn’t be looking to solve a problem that doesn’t exist, or take a leap in the dark which might undermine investment.”

Many in the sector say the move potentially undermines the ability of the government to deliver the 60% cuts in carbon emissions the Climate Change Committee advised should be achieved by 2030 last week.

A White Paper is to be published in Spring 2011.

By Vicky Portwain (theenergycollective)

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Source: theenergycollective, December 21, 2010