Budget 2017: UK steers away from new green subsidies

Philip Hammond (Photo: HM Treasury)

The UK government has confirmed that there will be no new subsidies for renewable power deployments until 2025 under the new scheme set to replace the Levy Control Framework (LCF) which funds new renewable electricity projects.

The new framework states that there will be no new low carbon electricity levies until 2025 when the burden of such costs on energy bills are predicted to start falling.

Existing auctions, confirmed until 2020, will still go ahead, including the commitment of up to £557 million for further Contracts for Difference (CfD) for less established renewable energy technologies outlined in the recent Clean Growth Strategy, the UK government confirmed.

The Control for Low Carbon Levies framework, published alongside the Autumn Budget on November 22, 2017, as a replacement for LCF, covers all existing and new low carbon electricity levies, including CfD, Feed-in-Tariffs and the Renewables Obligation.

Anything outside of this scope is classed as a new levy, the new framework states.

The government said the control does not rule future support for any technology, and that it will monitor the total cost of these schemes, without seeking to cap or set a budget for low carbon electricity levies.


UK turning its back on renewables?


Reacting to the announcement, the Renewable Energy Association (REA) has called the government on behalf of the industry to clarify how it plans to bring new projects forward, including less developed technologies such as tidal and advanced waste-to-energy.

James Court, Head of Policy and External Affairs at REA, said: “Whilst the announcements for electric vehicles are positive, the UK government seem to be turning their back on renewables by announcing no new support for projects post 2020 and a freeze on carbon taxes. This could see a hiatus in much needed infrastructure development. Considering this is coming only a couple of months after the much vaunted Clean Growth Plan, it’s hugely disappointing.”

Commenting on the budget announcement, Hugh McNeal, RenewableUK’s Chief Executive, said: “The renewable energy industry has a little more certainty than it did this morning. The existing budget of £557 million remains intact, and there is a commitment to maintain the Carbon Price Floor at current levels until coal comes off the system. The removal of an annual cap on the LCF reduces the risk of a boom and bust cycle.

“While this is welcome, what is missing is the ambition to take full advantage of the UK’s global-leading renewables industry at such a crucial time for our country.

“Onshore and offshore wind are the cheapest options for new power in the UK and support thousands of jobs across the country, while our marine renewables and floating offshore wind sectors offer new industrial opportunities for the UK to be a global leader.”

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