Skip to content

Britain To Phase Out Green Energy Subsidies

Kiran Stacey, Financial Times

British taxpayers will no longer have to fund renewable energy by the mid-2020s, according to a senior official, in the latest sign of the government’s determination to scale back on green subsidies.

Stephen Lovegrove, the lead civil servant at the Department of Energy and Climate Change, told a conference in London on Tuesday that he expected the UK to be largely free of renewables subsidies in 10 years’ time.

“By the mid-2020s, we would like to see the government retreat as much as is possible from [renewables] subsidies,” Mr Lovegrove told the energy security conference, which was organised by the Center on Global Energy Policy.

“The current administration is aiming to be more discriminating about the types of low-carbon technology it wishes to support. There is a cost being imposed on consumers which distorts the UK’s competitiveness and the pound in people’s pockets when they get home.”

David Cameron promised in 2010 to lead the “greenest government ever”, but since winning a majority in May the prime minister has cut subsidies to industries such as solar and biomass.

In July, Amber Rudd, the energy secretary, told the Financial Times that she wanted both solar and wind power to exist without public money. But Mr Lovegrove’s comments are the first time a senior government figure has put a date on that.

Doug Parr, chief scientist at Greenpeace, said: “The government should back key renewable technologies like wind and solar now to give families and businesses the cheapest and cleanest energy in the future.

“Instead, it seems obsessed with expensive and old technologies and slashing clean energy subsidies too fast and too broadly.”

But Mr Lovegrove told the conference: “The government is completely committed to the Climate Change Act, which has a lot of different targets [on carbon reduction] associated with it.”

While ministers are reducing subsidies for renewable power, they are also considering changing the rules for how companies can bid to provide new power capacity, amid warnings of an impending supply crunch.

Officials have said they are open to adapting the rules of the “capacity auction”, the first one of which was run last year. Although that auction procured power for the UK at a cheaper price than expected, only one of the companies bidding intended to provide it from a new power plant. That company told the Telegraph newspaper this week that it is running behind schedule and still has no financial backers.

Full story