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Where next for People Power?

Posted By Maf Smith, 16 December 2015
Updated: 15 March 2016

Sometime before Christmas, and probably this week, the UK renewables industry expects our Government to publish the results of the Feed-in Tariff Review. The signs are not promising.

At the end of August Government launched its review and sought responses to its proposals to radically change the Feed-in Tariff, which I blogged about here.

Industry and the wider public responded, and in two months Government received some 55,000 responses. In the last 6 weeks a small group of officials in DECC will have been through them all.

There are apparently “only” a few hundred substantive responses. That is still a lot of detail for Government to consider. And while the other 54,500 odd may have been generated by wider public campaigns, I hope that the Government has taken note. This stuff is popular.

A cynic might say, of course it's popular, who doesn’t like subsidy? But they’d be missing the point. People simply want to see more renewable energy in use in our homes, on our farms, on our factory and office roofs and car parks. People get it, they like it, they want more of it. Asked recently by the National Infrastructure Commission what type of infrastructure they saw as most important the public said simply: investment in renewables. Conservative, Labour and Lib Dem voters all listed renewables as the type of infrastructure we should be investing more in.

I hope that the consultation has at least alerted Government to the fact that UK voters from all walks of life see renewable energy as important.

These same people would also agree that Government is right to worry about energy bills. And these same people know that renewables can add to our bills. But it’s not the case that the public doesn’t know what it wants. What the public wants is for Government to show leadership and to square the circle; supporting renewable energy but finding ways to make it cheaper and getting it on a sustainable path where it doesn’t require subsidy.

Unfortunately though, the Feed-in Tariff review did not set out a plan to move industry off subsidy. Its tone was that “there is no money”, “enough is enough” and “please close the door behind you”. There was no positive vision to be found anywhere in its 62 pages.

And so ready was Government to paint industry as little better than a group of subsidy junkies, they failed to notice that within the UK renewables sector is a group which is up for a difficult conversation. That could have been started by Government using the Review to say “look, we’ve spent what funding we had available. This is a great success, but in the current climate something has to give. Here are our thoughts for how we change the Feed-in Tariff scheme and some options for how we can support you in the future without giving you a subsidy”.

Our hope is that the significant public response, and the creative, mature way in which many have replied, has given Government cause to reflect. So despite the lateness of the hour, and despite getting off to a bad start in the original review, there is still time for Government to conclude this Feed-in Tariff review in a meaningful way. How? Well here are some things we will be looking for when Government publishes its response.

  1. Government must come clean and admit that while it is right that costs have been falling, the cost assessment made was very poor, and supporting some renewable technologies still requires a level of support.
  2. Government can be clear that the future has to be a subsidy free one. Renewable experts agree, but need help to get there. However, there should be an acknowledgement that there are wider benefits to small scale renewables, including helping communities and rural businesses manage energy costs, opening up the market to a diverse mix of generation and supply, and drawing people in to doing their bit to tackle climate change. These are worth supporting and this can be done without subsidy.
  3. Government should re-profile what funding is available to provide a sustainable glide path of funding for these subsidised technologies that is spread over the next two (rather than four) years. Doing this means using any available money more usefully.

Building on this, the most important thing we need from Government is that any statement on the Feed-in Tariff is not the beginning of the end for renewables, but the beginning of an open conversation about what next.

What industry needs is an opportunity to work with Government, with an open discussion about options to back small scale renewable energy without subsidy. If Government moves fast this could be done before the March budget. How good would it be to have a Chancellor use his next budget to set out how Government is supporting people, farms and businesses in being able to install renewable energy, manage costs and do their bit, without adding more money onto customer bills?

A response like this would be good politics. It would be Government leading on protecting consumers, while working with industry to identify solutions, and giving the public both things they want.

Alternatively, the Government could decide that it simply wants to phase out the Feed-in Tariff and avoid any discussion about what comes afterwards. In doing this it could talk up the money it is saving consumers. But it could not credibly claim to have a low carbon plan. The frustrating thing is that within many of the 55,000 responses, there is a credible plan that offers both these things. Let’s just hope that that’s the plan which captured their attention, as it deserves to be the blueprint for the way ahead.

Tags:  DECC  Feed-in Tariff  government  subsidy 

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