Changes To The Renewables Obligation
Author: Amy Catlow
Published: Monday, 31 October 2011
The Government have recently published its proposed changes to the Renewables Obligation (RO). It appears that for the most part the mounting fears about severe cuts to the level of support that preceded the publication were unfounded. Any reductions that have occurred have been minimal.
It’s the cheapest of the renewable technologies – onshore wind farms – that have come off the worst. They have been hit with the largest cut of 10 per cent. Support for other technologies remains the same and, in fact, support for wave and tidal power was increased. It will be interesting to see what will emerge from this extra support if it’s confirmed next year.
At the moment these are the Government’s proposals for any changes to the levels of banded support available for renewable electricity generation under the Renewables Obligation. They refer to the period 2013-17 in England and Wales. They were published on 20 October 2011 but we are told that the consultation will run until 12 January 2012.
More information can be found at: http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/renew_obs/renew_obs.aspx
At the moment, the RO is the main financial mechanism used by the Government to incentivise deployment of large-scale renewable electricity generation. The idea behind banding reviews is to ensure that renewable developers continue to receive an appropriate level of support from investments.
These proposals are expected to give investors the confidence they need to keep investing, even if markets and innovations within sectors change or evolve. Meanwhile, Deputy Prime Minister, Nick Clegg says that the announcement “makes clear the Government’s commitment to long-term investment in the UK’s renewables’ industries”.
Chris Huhne, Secretary of State for Energy and Climate Change, concluded by saying in a press release: “By 2017, as a result of these proposals, we expect to see 70-75 TWh of renewable electricity in the UK. This is 70 per cent of the way towards the 108 TWh of electricity needed to meet the UK’s 2020 renewable energy target.”