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Tag Archives: energy subsidies

The Helm energy cost review

By Dave Elliott

In his wide-ranging review of energy costs for the UK government, Dieter Helm says ‘the cost of energy is too high, and higher than necessary to meet the Climate Change Act (CCA) target and the carbon budgets. Households and businesses have not fully benefited from the falling costs of gas and coal, the rapidly falling costs of renewables, or from the efficiency gains to network and supply costs which come from smart technologies. Prices should be falling, and they should go on falling into the medium and longer terms’.  And he sets out his ideas for enabling that to happen.                   (more…)

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Goodbye to FiTs

By Dave Elliott

A shift away from Feed-in Tariffs (FiTs) to project auctions as a way to support renewable energy seems to be underway across the EU. The UK government certainly has cut FiT levels and recently warned that the FiT system might be wound up entirely – and soon. Although it seems to have won a last minute partial reprieve, with the level of cuts being reduced from 87% to 64%, after something of an outcry, it is just a matter of time before it goes. Is this a good idea?

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The end of the FiT

By Dave Elliott

DECC’s consultation document on the Feed In Tariff (FiT) says: The future and size of the scheme will be determined by affordability criteria’, with the Levy Control Framework limits clearly being central. It goes on: ‘If following the consultation we consider that the scheme is unaffordable in light of these criteria, we propose ending generation tariffs for new applicants from January 2016 or, alternatively, further reducing the size of the scheme’s remaining budget available for the cap. This consultation seeks views on the impacts of scheme closure, whether implemented in the immediate term or as a phased closure over several years’. This seems not so much a consultation as an ultimatum: accept interim cuts or the whole thing goes now, but it will end anyway with, they say, their proposed ‘more stringent degression mechanism and deployment caps leading to the phased closure of the scheme in 2018-19’.

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UK energy prices – how not to cut them

by Dave Elliott

As we try to respond to climate change it seems inevitable that energy prices will increase. However this may not be the full story, unless, in a panic, we cut back the long-term development of renewables and energy efficiency.

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UK government support for nuclear and renewables

By Dave Elliott

The UK government has been trying to have its cake and eat it. It wanted nuclear but didn’t want to have provocative and visible subsidies for it. So it came up with a Contracts for Difference (CfD) system, which will replace the Renewables Obligation (RO) from 2017 (or for some projects, earlier) and would apply to nuclear, renewables and CCS projects. However it will allow different levels of support to be offered to each. As energy secretary Ed Davey put it, “There are likely to be variations in CFD designs between one technology and another, and perhaps also between different projects within the same technology.”

Nuclear, renewables and CCS projects are all eligible to apply for CfD contracts, with “strike prices” being negotiated separately. However there would be an overall cap on how much extra cost could be passed on to consumers, via the Levy Control Framework (LCF) cap, currently set at £2.35bn for low-carbon electricity, rising to £7.6bn in 2020/21.

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