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UK Signals Deep Cuts For Renewables As Energy Secretary Protects Consumers

Alex Morales, Bloomberg

The U.K. signaled more cuts to renewable power incentives as Energy and Climate Change Secretary Amber Rudd put minimizing consumer energy bills and cutting carbon at the top of her list of priorities.

Amber Rudd

 London. 21 July: The UK Energy and Climate Change Committee questions the secretary of state, Amber Rudd, as part of the committee’s inquiry into the Department of Energy and Climate Change’s priorities for 2015. Photograph: parliament

“It is our intention to make sure that subsidies don’t remain,” Rudd told Parliament’s Energy and Climate Change Committee on Tuesday. “We want subsidies to be the way we get the low-carbon economy going, and then for the state to step back.”

Ten weeks into her job, Rudd has scrapped assistance for onshore wind projects under one program and indicated to the panel that she’ll exclude it from another. She also cast doubt on whether there would be another auction for renewable energy contracts, the government’s main program for spurring low-carbon power. 

Prime Minister David Cameron’s new Conservative administration is curbing spending as part of a drive to balance the budget and also has its eye on reducing assistance programs for renewables, which are funded largely through consumer energy bills.

“The idea of supporting renewables is a poisoned chalice to the government,” Doug Parr, policy director at Greenpeace U.K., said in a phone interview. “Renewables investors are getting death by a thousand rumors.”

Parr said he’s expecting the government may announce cuts to solar subsidies on Wednesday that go over and above an existing formula of regular reductions in feed-in-tariffs, one of three assistance programs for solar power. […]

‘Apocalyptic Scenario’

“I think it’s more likely that they’re going to delay them rather than the apocalyptic scenario of not having another auction round,” Robert Norris, a spokesman for the industry group RenewableUK, said by phone. “It’s very unhelpful, vague messaging from government which could be interpreted in a number of ways, which is spooking investors.”

Norris said that excluding onshore wind from any new auctions “would mean the government is in effect rigging them and preventing competition.”

“What renewables investors need is some sort of confidence that broadly speaking they’ve got a government that is behind them,” Parr said. “You can absolutely state with confidence that that’s not what they’ve got at the moment.”

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