Renewables Face Subsidy Battle in the UK with EMR
By Anne Lewis-Schneider
The Electricity Market Reform (EMR) is forcing UK renewables to fight for support and is also hoping to open up the job market in green energy to generate approximately 200,000 jobs. The government has just had the EMR delivery plan signed into law which confirms a set payment for low carbon developments through the Contract for Difference (CfD) and also a Capacity Market plan which will reward those power plants that maintain a state of readiness to generate energy when it is needed at short notice. Renewable energy companies that have been in the market for a longer period of time will be able to compete for available subsidies after 2015.
The Department of Energy and Climate Change (DECC) has said that it is hoped that the private sector will be encouraged to invest with the changes that have been made with the Contract for Difference, and says that the investment opportunities are set to attract a further £40 billion on top of already projected figures for investment in low carbon renewables as well as providing 10 million homes with power and reducing the load of carbon emissions substantially. Energy Secretary Ed Davey commented that the energy bill is sending a clear message to the industry and also to would-be investors by giving the certainty of prices would make the UK an attractive investment option. He added that energy prices should become more affordable and cleaner energy will be available as well as the prospect of job creation across the UK.
Provisional approval has already been given to a number of projects that have been marked as affordable and these are in line for CfD fast forwarding. They include Drax coal burning plant which is set for conversion to biomass burners, offshore and onshore wind projects, and a final decision will be made in the spring of 2014 and the awarding of contracts to be finalised at the end of the same year. Government is also aiming to get more competition going amongst the low carbon technologies that have been operational for longer periods of time. Auctions have been discussed as a means of increasing competition and as a way of awarding subsidies for established low carbon technologies. These include solar and onshore wind resources which have proven to be amongst the most affordable and cost effective of technologies.
Renewable Energy Association chief executive Dr Nina Skorupska hopes that this will bring down the prices of renewables even further thus making them that much more affordable. She is pleased that the auction idea has been given merit and also that the government will be in consultation with the industry before any final decisions are made. RenewableUK deputy chief executive Maf Smith has said that he hopes the move towards auctions does not send the wrong message to the renewable energy industry because of what he call substantial cuts that have already been made in the sector. He has cautioned against making any decisions that could adversely affect the industry at this point in time. Government has just announced that renewable nuclear energy reached a high of 37.1% up 3.2% from the same time last year and that wind, hydro and solar had increased by 1.5% to 13.2% during the same time frame.
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