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MARKETS I UK


The UK Government has announced its latest changes to renewable energy support in the UK. This is not the first time the UK Government, or indeed any Government has changed energy subsidies, but the UK remains one of the few European markets that has not retrospectively changed subsidy support. This is not for a lack of trying but the last time they tried to make such changes they lost the subsequent court battle.


They have been more cautious in making changes since that court loss but are finding themselves on a similar path when they announced the intention to close the Renewable Obligation Certificate (RoCs) scheme that provided large scale PV installations with a guaranteed income but will now close two years earlier. The alternative is a Contract for Difference (CfD) scheme where potential renewable energy projects will be auctioned off to the lowest bidder. A set price will be announced that companies will compete against.


A number of UK players have taken umbrage at the latest changes as company plans are made based on Government policies and such changes undermines investor confidence in a sector. There is currently a case in play that challenges the UK


Government decision but the consultation has gone ahead and the Government has confirmed


Budgeted auction


The first positive from the recent announcements was that renewable electricity projects will compete for £300 million in support this autumn. An increase of £95 million from the indicative budget published in July.


The funding for Contracts for Difference, which the Government claims will provide long-term certainty for investors, will be a cornerstone of the Government’s reforms to the electricity markets, designed to drive investment in a new generation of clean, secure electricity supplies.


Low-carbon electricity projects will compete at auction for the contracts, which will deliver new capacity much more cheaply than through the previous arrangements, resulting in hopefully lower bills. It’s estimated that the reforms to the electricity markets will mean that average annual household electricity bills are around £41 lower over the period 2014 to 2030 than decarbonising without these changes.


The increased budget will be split between different types of technologies:


Established technologies, such as onshore wind and solar, will compete for up to £65 million in support, reflecting the fact


Issue V 2014 I www.solar-international.net 25


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