Government U-Turn on Renewables is Damaging the Industry

Government U-Turn on Renewables is Damaging the Industry

  • 21 Dec 0

The entire global energy system is undergoing a clean revolution as the old practices of centralised power and use of fossil fuels are declining. In Paris, world leaders set legally binding targets to decarbonise economies to keep temperature rises below 2°C. This is a necessary development and presents a huge economic opportunity. Industry estimates expect that renewables alone will see more than $8tn of investment in the coming years with $3.7tn specifically in solar.

Until recently the UK seemed to understand and support this. In the second quarter of this year, the UK got 25% of its electricity from renewables and has set a target of 30% by 2020. Costs have fallen, with the latest ground-mounted solar and onshore wind now cheaper than new nuclear, and offshore wind – where the UK is a world leader – is not far behind. Despite this, the last six months has seen a number of drastic U-turns from the UK government. Onshore wind and large solar have had financial support removed and planning applications blocked. The removal of the climate change levy exemption from renewable electricity scheme was also a major blow to renewable energy contracts. The zero carbon homes target and energy efficiency schemes have been scrapped and the Green Investment Bank is threatened with privatisation.

The government claims that it is time to stop supporting renewable energy despite the industry being in relative infancy. Renewable energy needs government support to realise the best results and ensure investment in development. Whilst the Government claims that the U-turn is necessary to protect customers’ bills but the numbers do not support this. Recent cuts to rooftop solar will save just 0.9% off a yearly bill by 2020. In addition to this, the single most effective assistance that can be offered to reduce bills, insulating homes, has had the vast majority of public support scrapped.

Many of the alternatives the Government is pursuing are actually more expensive than renewables. The development of Hinkley Point C will cost consumers twice the current wholesale price of electricity. There is also huge support for fracking despite environmental concerns. The Government’s standpoint is damaging to individuals, investment and businesses. Around 20,000 people may lose their jobs as a result of the latest changes to solar subsidies. Financiers are likely to walk away from the sector which will see investments in the development of skills and training wasted. Despite numerous warnings from across the sector, the Government continues along a path which is detrimental to the industry.

In response to this criticism, the government is now broadcasting discussion on innovation, highlighting a plan to double investment in clean energy research and development but much of this will benefit nuclear development. In addition it is vital that supporting future innovation is not seen as a substitute for investment needed today. This is demonstrated by the fact that, those countries with the largest renewable manufacturing industries today, developed and supported their local industries as a foundation for this.

The reason that the cost of solar has fallen by 80% in just a few years is as a result of governments across the world supporting the deployment of such technologies which has driven research and development. In the UK, researchers are looking at new ways to make renewables even cheaper and more effective with examples of this from super-efficient perovskite solar cells in Bath, to graphene materials in Manchester. In other technologies, from tidal energy in Orkney and new forms of offshore turbine foundations in Glasgow and Blyth – progress is continuing on hundreds of fronts.

The opportunities provided by renewables are much bigger than turbines and panels. These are disruptive technologies that open huge new avenues. Energy storage and smarter grid management are two of the hottest areas for businesses looking to take advantage of the recent surge in renewables as they can improve the economics and store power for those times the sun is not shining or the wind does not blow. Schemes are being developed in which people are paid an annual fee for access to a home battery which when aggregated into their thousands can be used to help balance the grid yet these opportunities are only available thanks to the rapid growth we have seen in recent years. To continue this, the sector needs stability and political support. If the government really wants innovation continue, it needs to provide both. In the long run we will be green, renewable energy will succeed and will grow to be one of the biggest industries in the world. In meantime businesses will need to be resilient and the UK needs to review its policies if it is to become a market leader in this field.


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