Shadow Energy Minister Tom Greatrex writes to Ed Davey calling for clarification on whether or not renewable energy schemes are at risk of being cut
Shadow Energy Minister Tom Greatrex has challenged the government to clear up once and for all whether renewable energy schemes will be subject to the Prime Minister’s “green levy” review following conflicting signals from Ministers.
Renewable energy companies were relieved earlier this week when Conservative Energy Minister Baroness Verma declared that “no one is talking about changing support for large-scale renewables or feed-in tariffs”, indicating that the Renewables Obligation and upcoming contract for difference schemes would not be cut as a result of the review.
Renewable energy trade associations also confirmed this week that they had received assurances from the Department of Energy and Climate Change that Department for Energy and Climate Change (DECC) that “between now and 2020, the support we give to low carbon electricity will increase year-on-year to £7.6bn – a tripling of the support for renewable energy”.
However, Conservative Energy Minister Michael Fallon had previously insisted that the government was looking at all “green levy” schemes as part of the review.
When asked by Labour MP Dr Alan Whitehead at yesterday’s Energy Statement in the House of Commons to clarify which schemes were under review, Energy and Climate Change Secretary Ed Davey failed to offer any assurance that renewables schemes would be exempted. “The honourable Gentleman, who is very knowledgeable in this area, will have to await the outcome of the review,” Davey replied. “It will be announced at the Autumn Statement or before. He and his colleagues will hear the results of the review at that time.”
The response prompted a letter from Greatrex to Davey calling on him to clarify precisely which schemes are being reviewed following the Prime Minister’s controversial pledge to “roll back” some “green levies”.
“In this morning’s Annual Energy Statement you were asked by Dr Alan Whitehead MP which of the levies on consumer bills were subject to the review initiated by the Prime Minister at Prime Minister’s Questions on Wednesday 30 October 2013,” the letter states. “Your response failed to answer the question, and leaves many concerned that either you do not know or you would rather not say.”
It calls on Davey to confirm which of the carbon floor price, energy company obligation, warm homes discount, renewable obligation certificates, feed-in tariffs, and contracts for difference are subject to review. “Given the level of concern and confusion caused by your response today, I – and many others – would appreciate a swift response,” Greatrex writes.
Sources have indicated that the schemes most likely to be reformed are the Energy Company Obligation efficiency scheme and warm homes discount fuel poverty grant scheme, with speculation mounting that some of the costs of the schemes could be moved onto general taxation.
Renewable energy firms have been offered assurances that there will not be late changes to support schemes designed to encourage investment in clean energy, and Davey has pledged to “fight like a tiger” to protect “green levies” that serve to curb energy bills in the medium to long term, while also helping to cut greenhouse gas emissions.
However, some Conservative MPs are pushing for the review to cover all “green levies” and are keen to see support for renewable energy schemes cut alongside support for energy efficiency schemes.
Responding to the letter a DECC spokesman gave the clearest indication yet that renewable energy schemes would not be discussed as part of the green levies review.
“The Government is looking at how to get people’s energy bills as low as possible to help hard-pressed families,” he said in an emailed statement. “We’ve already increased competition, brought new players in to the market to offer consumers real choice and the most vulnerable are getting direct help with their bills this winter. We’ll continue this work to make sure consumers are getting a good deal.
“No one is talking about changing investment incentives for renewables, such as the Renewables Obligation, Contracts for Difference and feed in tariffs, which are essential for investor confidence in the renewables sector and our commitments to a low-carbon economy. Between now and 2020, the support we give to low carbon electricity will increase year-on-year to £7.6bn – a tripling of the support for renewable energy.”