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UK's Government onslaught of Levy Control Framework continues

4C Offshore | Chris Anderson
By: Chris Anderson 22/07/2015 Edited by Chris Anderson
Following the Energy and Climate Change Committee questioning of Rt Hon Amber Rudd MP, Secretary of State, Department of Energy and Climate Change as part of the Committee’s inquiry into the Department of Energy and Climate Change's (DECC) priorities for 2015, Parliamentary Under Secretary of State Lord Bourne of Aberystwyth issued a Written Ministerial Statement to the Lords.

Rt Hon Amber Rudd MP the Secretary of State for Energy and Climate Change is today announcing a package of reforms to take control of the costs of renewable electricity subsidies under the Levy Control Framework (LCF).

According to the statement the latest forecasts under the Levy Control Framework to 2020/21, confirmed in the Office of Budgetary Responsibility’s (OBR) report ‘Economic and Fiscal Outlook – July 2015’, have shown that forecast spend on renewable energy subsidy schemes is set to be higher than expected.

The Government has set a limit of £7.6bn in 2020-2021 (in 2011/12 prices), so the current forecast is £1.5bn above that limit. The forecast of future spend under the LCF is now estimated at around £11.4bn (in nominal prices) or £9.1bn (in 2011/12 prices) in 2020/21. The Government is determined to bring these costs under control.





These include

Changes to grandfathering provisions for biomass co-firing and conversion plant under the Renewables Obligation (RO)

Proposal to controll spending on support for solar PV electricity generating stations of 5MW and below within the RO


Remove grandfathering for solar PV projects that are not accredited under the RO


Changes to the preliminary accreditation rules under the Feed-in Tariff (FIT) scheme, followed by a wider review of the scheme to drive significant further savings


LCF budget post-2020 -
The Government will set out totals for the Levy Control Framework beyond 2020,

In the autumn the Government will set out its plans in respect of the next CFD allocation round
.



Energy and Climate Change Secretary Amber Rudd said:

“My priorities are clear. ... Our support has driven down the cost of renewable energy significantly. As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies”.

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