This morning, DECC announced new measures to reduce the cost of renewable subsidies over the coming years. More information about the changes can be found here: https://www.gov.uk/government/news/controlling-the-cost-of-renewable-energy
Commenting on the changes, Matt Osborne, Principal Risk Manager at Inenco, said:
“Renewable subsidies have added significant costs to the energy bill in recent years and tackling this will be welcome news to both businesses and consumers. However, this does create further regulatory and investment uncertainty for both renewables and UK generation as whole.
Reducing subsidies for large scale and established renewable technology that are close to reaching parity with conventional forms of generation makes economic sense. However, extending such policy to small scale generators where subsidies are more critical for their financing runs the risk of rapidly reducing further investment in this area. The uncertainty around future support for renewables will undoubtedly put many projects in development on hold and any potential investor in UK infrastructure will be watching with concern as stability is replaced by uncertainty, rendering future investment decisions all but impossible.
At a time when power margins are increasingly tight and new infrastructure is so critical, government must move swiftly to re-establish a stable investment environment to encourage investment in all technologies to guarantee security of supply in the medium to long term.”