UK Renewable Energy Cuts

Will the UK Cut Renewable Energy Subsidies?

Written by Brian Hicks
Posted June 20, 2012

Many, including UK climate change secretary Ed Davey, were a bit unnerved due to a recent statement made by Cabinet Office minister Oliver Letwin to Terry Stewart, the president of the Dorset branch of the Campaign for the Protection of Rural England (CPRE).

An email between the two alluded to the fact that by 2020, the government will no longer provide subsidies for solar photovoltaic or onshore wind technologies.

Davey, who reaffirmed his commitment to wind energy initiatives last week, stated that the government must be honest with investors in regards to their intentions about future subsidies for energy technologies.

Currently, Davey is working toward establishing subsidy levels for renewable energy projects available through the Renewables Obligation (RO). He stated that if subsidy cuts are too high, such as the 25% reduction suggested by chancellor George Osbourne, it will be detrimental to the industry because investors will be discouraged from undertaking new projects. Rather, he supports cuts that are closer to 10%, which he believes will allow the renewable energy industry to continue to grow.

The Department of Energy and Climate Change (DECC) also spoke on this matter, in an attempt to reconcile the discord. They stated that their hope is to be able to drive down the costs of renewable energy projects so that subsidies would no longer be needed for their undertaking.

The costs of energy technology have been dropping, and the government is ambitious that this trend will continue to the point where soon, subsidies will be able to be phased out.