British MP committee criticises government for damaging investor confidence in energy sector

“Despite six months of promises, Government has still to properly account for the apparent sudden increase in expenditure which has been used to justify the rapid withdrawal of support for the solar industry,” said Paul Barwell, CEO of the Solar Trade Association
“Despite six months of promises, Government has still to properly account for the apparent sudden increase in expenditure which has been used to justify the rapid withdrawal of support for the solar industry,” said Paul Barwell, CEO of the Solar Trade Association

An influential House of Commons Energy and Climate Change Select Committee on March 3rd, 2016 published the report into “Investor confidence in the UK energy sector.”

The report focuses in particular on the low-carbon energy budget, called the Levy Control Framework (LCF). It describes how a lack of understanding surrounding the LCF is hampering investment decisions and risk assessments across the energy sector.

The Solar Trade Association (STA) and a number of solar businesses including Lightsource, Next Energy Solar Fund and Octopus Investments gave evidence to the committee as part of the inquiry’s oral evidence sessions.

“This influential Committee has added its voice to the growing chorus of criticism of the secrecy surrounding the Levy Control Framework budget,” comments Paul Barwell, CEO of the Solar Trade Association.

“The best way to ensure the market’s confidence and trust is to be open with what is being spent, how much is left and how you are managing and forecasting future spend. Despite six months of promises, Government has still to properly account for the apparent sudden increase in expenditure which has been used to justify the rapid withdrawal of support for the solar industry.”

The Solar Trade Association is also calling for the Levy Control Framework to be managed accurately, so that annual spending caps change as wholesale prices go and up and down, said Barwell.

“In the real world wholesale prices have dropped far more than Government ever anticipated so the Levy Control Framework needs to adapt to this reality. The Good Energy report showed that solar saved GBP 300million on electricity wholesale costs in 2015, a figure that will increase further in 2016,” Barwell emphasizes.

“Large and even medium-sized solar is now entering an investment hiatus, as the Government has taken away virtually all support for projects over 1 MW in size, with no plans for future support. This is worse than just a knock to investor confidence – it is a fundamental lack of understanding of the shape of our future energy system and the vital role of solar power.”

The report also criticizes the succession of policy changes and scheme closures in renewable energy since the General Election. Solar has been particularly badly affected by these policy changes, despite delivering unprecedented cost reductions and the fact that there was no Conservative manifesto commitment to reduce support for solar prior to the election.

 

2016-03-03 | Courtesy: STA | solarserver.com © Heindl Server GmbH

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