Skip to content

Green Energy Lobby Reacts With Fury To Osborne’s Cuts

|
ReNews & Green Click

The UK Government has been accused of making “obsessive attacks” on the renewables industry, with leaders upset ministers have “moved the goalposts again” in today’s Summer Budget.

RenewableUK has lead complaints claiming George Osborne’s announcement to scrap the Climate  Change Levy  is another example of the government “changing the rules” just weeks after it was announced there would be an early clawback of the Renewables Obligation.

RenewableUK’s Director of Policy, Dr Gordon Edge said it was the latest in a long line of “unfair, illogical and obsessive attacks” on the green energy industry.

He said: “The chancellor’s announcement that renewable electricity will no longer be exempt from the Climate Change Levy is a punitive measure for the clean energy sector. Until now, Levy Exemption Certificates generated as a result of the CCL have provided vital financial support for renewable energy producers.

“The chancellor says the removal of the exemption will earn the treasury £450 million in 2015/16, rising to £910 million in 2020/21.

“We’re suddenly looking at a substantial amount of lost income for clean energy companies which was totally unexpected. For example, Levy Exemption Certificates account for just over 6% of onshore wind generators’ revenues.

“The government had already announced an end to future financial support for onshore wind – even though it’s the most cost-effective form of clean energy we have. Now they’re imposing retrospective cuts on projects already up and running across the entire clean energy sector.

“Yet again the government is moving the goalposts, pushing some marginal projects from profit into loss. It’s another example of this Government’s unfair, illogical and obsessive attacks on renewables”.

Full story

 

Renewable energy sector reacts with fury to Budget plans to axe levy support

The UK’s renewable energy sector has attacked Government plans to change the rules governing the Climate Change Levy – a measure which was originally designed to promote the generation of clean energy.

RenewableUK, the trade association representing the wind, wave and tidal energy industries, strongly criticised the Chancellor’s announcement in his budget speech that he is retrospectively removing the exemption for green energy.

RenewableUK’s Director of Policy, Dr Gordon Edge, said: “The Chancellor’s announcement that renewable electricity will no longer be exempt from the Climate Change Levy is a punitive measure for the clean energy sector. Until now, Levy Exemption Certificates (LECs) generated as a result of the CCL have provided vital financial support for renewable energy producers.

“The Chancellor says the removal of the exemption will earn the Treasury £450 million in 2015/16, rising to £910 million in 2020/21.

“We’re suddenly looking at a substantial amount of lost income for clean energy companies which was totally unexpected. For example, Levy Exemption Certificates account for just over 6% of onshore wind generators’ revenues.

“The Government had already announced an end to future financial support for onshore wind – even though it’s the most cost-effective form of clean energy we have. Now they’re imposing retrospective cuts on projects already up and running across the entire clean energy sector.

“Yet again the Government is moving the goalposts, pushing some marginal projects from profit into loss. It’s another example of this Government’s unfair, illogical and obsessive attacks on renewables.”

George Osborne said in his Budget statement: “Now we have a long term framework for investment in renewable energy in place, we will remove the out-dated Climate Change Levy exemption for renewable electricity that has seen taxpayer money benefitting electricity generation abroad.”

Whilst there was an issue with foreign generators benefiting from this policy, it has also driven investment, and has been factored into both original project finance decisions and current business plans.

This measure is due to come into effect on the 1st of August and according to the REA such snap changes undermine confidence in the UK from the finance community, as well as making renewables less attractive compared to fossil fuel generation.

The value of the exemption was worth £5.50 per MWh, and all financial assumptions have been based on this.

The REA says it will be calling on the Treasury to rethink this proposal, and urges the Chancellor to work with the industry to address the problem of foreign generators without hindering the UK’s ability to meet our climate targets.

Chief Executive of the Renewable Energy Association, Dr Nina Skorupska said: “The removal of the Climate Change Levy exemption for renewables will have a significant effect for our members immediately, and will undermine investor confidence by changing the stable market conditions needed for financing and business planning.

“If the intention was to remove the anomaly of international firms benefiting from the CCL exemption, this is a disproportionate action that now turns a measure designed to encourage low-carbon electricity, into just an electricity tax for business.”

ADBA has calculated that the Budget’s smallprint includes an £11 million hit on the anaerobic digestion sector alone.

The removal of the Climate Change Levy exemption for renewables will reduce revenue by around £5 per MWh. For the 2.2TWh of electricity generated by the AD industry this will cost around £11 million per year, impacting investor and operator confidence.

Full story