A new Impact Assessment published by the UK Government shows awareness that cutting renewable subsidies could cost the country 63 million tonnes of CO2.
According to the Impact Assessment (PDF) — which assesses the impact of closing the Renewables Obligation scheme (RO) for onshore wind by the 31st of March, 2016 and is part of a suite of documents prepared in advance of the new Energy Bill — the need to make adjustments to the RO stems to the fact that the possible deployment of renewable energy projects has increased from an originally projected 11 to 13 GW to now sit somewhere “between 12 to 15 GW.” The issue arises when taking into account the lack of changes to the RO to account for this increase, which was not budgeted for upon enacting the RO in the first place.
“In the absence of intervention, onshore wind could add to the over-allocation of renewable energy subsidies against the [Levy Control Framework (LCF)],” the authors of the Impact Assessment concluded. “As the costs of the levy funded schemes are paid for by consumers through their energy bills, the Government takes potential risks to the LCF seriously and will act where necessary to ensure that costs are contained.”
The Impact Assessment provides two options — a “Do Nothing” option which leaves the RO open to new onshore wind projects with no end date, or the “preferred option” of putting an end date on the RO of March 31, 2016. The primary justification for Option 2 being the “preferred option” is due to the Department of Energy and Climate Change’s calculations that “with the closure of the RO from 1st April 2016 to new onshore wind projects, annual RO spend could be up to £270 [million] lower in comparison to the Do Nothing option.”
However, while this does present itself as an issue that needs some attention, the unintended trickle-on effects of the Government’s intended plans are severe.
Specifically — and as highlighted in the Impact Assessment — lifetime CO2 emissions are up to 63 million tonnes of CO2-equivalent higher as a result of closing access to the RO for onshore wind than if left open.
“We have consistently argued that this policy can only hinder the UK’s efforts to meet binding climate change targets, and the government has now admitted their decision could increase the UK’s carbon emissions by 63 million tonnes,” said Michael Rieley, Senior Policy Manager at Scottish Renewables. “The decision to close support for onshore wind has caused a ripple effect of uncertainty throughout the renewables industry, removes one million pounds a year from local communities, and may only end up saving 30 pence on the annual household electricity bill.”
“What we need now is for the UK Government to set out fair and reasonable grace periods as soon as possible for those projects that will fall outwith the scope of this decision,” Mr Rieley added.