The UK government culls the low carbon sector

Dark clouds looms over UK’s low carbon sector. Photo credit: Rob Faulkner via Flickr.
By Anders Lorenzen

Last year we wrote that one of the biggest threats to the UK’s effort to deal with climate change, is that the government planned to entirely remove subsidies for onshore wind power. This would threaten the survival of an industry which delivers the cheapest low carbon energy we have.

Instead of being implemented in 2017 as first suggested, this is in fact happening next year which leaves a shorter time frame for the industry to fight these new rules and build new projects before the subsidies end. It has already started to hurt the industry; it has been reported by Reuters that a staggering 2,500 new wind turbines, amounting to 7.1 gigawatts (GW) of new generating capacity, might not be built.

Sadly it did not stop there.

While they were at it, the government also axed solar subsidies for large scale solar farms; the Renewable Obligation (RO) subsidy that hands out subsidies to large new solar farms for up to 5 megawatts (MW) of generating capacity, will now stop in April 2016.

Furthermore, they also announced a consultation for changes to the Feed-in Tariff (FIT) scheme that is given to small scale solar, such as rooftop solar.

Biomass subsidy is also being hit; the guaranteed RO subsidy level given to coal power plants converting to biomass, such as UK’s biggest power plant Drax, has also been cut. Though this might please some environmentalists who have argued that biomass should not qualify as a renewable energy source, as in some cases, depending where the wood is sourced from, it could have worse effects than coal.

The government’s flagship ‘Green Deal’ scheme has also been axed; when it launched in 2013, its objective was to make homes greener and more efficient. It has in fact long been deemed a failure, however as it is not being replaced, there is literally no incentive to make Britain’s inefficient housing stock more efficient nor strong green building codes for new buildings.

A law that would make sure all new homes built from 2016 and onwards were ‘carbon zero’ has also been scrapped.

And an incentive for accelerating the uptake of electric cars has also been dropped; until now, if you bought an electric car you would pay no tax but this is no longer the case. Alongside the current low oil prices, this is likely to dent the UK’s growing electric car industry.

But the biggest change of all is to the Climate Change Levy, initially set up to encourage investments in renewable energy technologies through making renewables exempt from it. This now applies to all energy forms.
Combined with a number of smaller changes, these are the main changes that make the UK look far from a country that would lead action on climate change – less than half a year before the crucial Paris climate talks. Environmentalists, NGOs and industry would say that individually all these changes are bad, but combined they are disastrous.

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One response to “The UK government culls the low carbon sector

  1. You forgot to mention the increase in VAT on domestic renewable equipment will be hiked from 5% to 20% soon, probably April 2016. The government haven't responded with what they will do about the European Court ruling on this.

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