Clean Power

Published on February 5th, 2016 | by Guest Contributor


Will 2016 Be “Annus Horribilis” For UK Sustainable Energy Sector?

February 5th, 2016 by  

By Ann Noon

Ahead of the new much reduced Feed-In Tariff (FiT) rates for small scale solar, wind and hydro power coming into effect next week, Ashden is publishing an alarming new report detailing how businesses, communities and employers are already being affected.

After at least 14 changes to the sustainable energy policy landscape in the UK in the last six months of 2015, key players in the sector are anticipating an “annus horribilis” ahead, predicting a loss of sales, jobs and economic security.

In a survey of Ashden Award winners past and present – representing a combined workforce of more than 4,000 people and annual turnover of almost £80 million – the majority reported that they are preparing for loss of growth and investment this year.

More than half reported that they had either already lost or expected to lose sales as a result of the policy changes. Nearly 50% stated that there have been or will be redundancies within their organization, and one in two said that they are reviewing their business model, including moving away from electricity generation and looking to Europe for business.

According to the environmentalist and writer Jonathon Porritt:

“If anyone knows what’s really going on in the UK’s sustainable energy sector, it’s the winners of Ashden Awards over the last 15 years. The negative impact of the Government’s policy changes over the last nine months is already being felt, and the pain is clearly going to get a great deal worse.

“This makes no sense whatsoever. As the rest of the world moves forward on the Paris Agreement, the UK is heading rapidly in the opposite direction – with potentially disastrous consequences for the sector, for jobs, and for the UK’s entire energy strategy.”

Cutting Feed-in Tariff generation rates, whilst encouraging the ‘dash for gas’ and new nuclear projects, has left the renewable energy industry unclear on the way forward and fostered uncertainty among investors.

One organization surveyed said: “You think you are traveling in a certain direction having spent years laying down the ground work in the industry and then overnight these rails are ripped up.”

According to Ashden’s UK program manager Simon Brammer: “Even before all of the policy changes come fully into effect, the UK is off track to meet its own national target and EU commitment to generate 15% of its energy from renewable energy by 2020.

“What’s needed is a clear, long term timetable for UK energy policy in order to reignite confidence and investment in the clean energy sector. The next five years cannot be characterised by the uncertainty and sudden U-turns and curve balls that we saw in 2015.”

With the survey findings Ashden has produced a report – FiT for the 21st century? A survey of the impact of recent UK policy changes on the sustainable energy sector – examining the impact of the raft of policy changes on some of the leading sustainable energy practitioners and entrepreneurs in the UK. They represent a broad spectrum, from small start-ups to multi-million pound businesses, all working to accelerate the transition to a low carbon economy.

FiT for the 21st century? includes a series of its recommendations for government for 2016, from introducing new policies and strengthening existing ones on home energy efficiency to learning from the low cost finance model pioneered by the government-owned German bank KfW.

Download a copy of FiT for the 21st century? A survey of the impact of recent UK policy changes on the sustainable energy sector at

Check out our new 93-page EV report, based on over 2,000 surveys collected from EV drivers in 49 of 50 US states, 26 European countries, and 9 Canadian provinces.

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  • egriff5514

    One other piece of UK renewables still hanging there waiting for a decision – the Swansea tidal lagoon and its follow up lagoons… 7% of all UK electricity could be supplied by it, Osborne doesn’t seem to like it, Tata just invested in it…

    • Bristolboy

      7% is an absolute upper amount, assuming Swansea Bay and all other tidal lagoons get constructed – something which is extremely unlikely.

      Also it was the Gupta family who have invested in Tidal Lagoon Power, not Tata.

      • egriff5514

        Oops. Tata in the news too lately…

  • neroden

    Cameron and the Tories are just a disaster for the country. Upper Class Twits — no sense whatsoever.

  • Bristolboy

    I’d just like to say, I think 2015 was “annus horribilis” for the UK renewable energy industry, next to that I don’t think it can get much worse.

  • JamesWimberley

    Jemmy Madison had a point. In a nearly pure parliamentary system like the UK’s – the Crown and the Lords have negligible leverage, and party discipline emasculates MPS in the Commons – it is far too easy to change policy. In the hands of idiots like Rudd and Osborne, this leads to wild “Look, Ma, no hands!” gyrations.

    Watch for the rocks in the road.
    1. Hinkley C still has not got a final investment decision from EDF. This strongly suggests EDF is having second thoughts. It may still pull the plug.
    2. The next CdF auctions for wind and solar will give much lower prices, invalidating the panicky argument for slashing solar FITs as well as the threadbare case for Hinkley.
    3. Onshore wind and solar developers like Lightsource may launch projects free of incentives, selling the output in long-term PPAs to large customers.
    4. At current bargain-basement oil prices, gas fracking does not pay. (The prices are linked). Expect low takeup, however much ministers grovel to the industry.

    • Bristolboy

      Interesting and insightful as always, here are my thoughts to each of your 4 bumps:

      1. Hinkley may or may not ultimately get built, but one thing is for certain – it will be extremely unlikely to be generating by 2025. However yhe general issues around this will impact on other nuclear plants and energy investment more generally.
      2. Onshore wind will not get any future CFDs (aside from the possible “subsidy-free” CFDs) and it is looking like the same is true for solar. Probably because the government realises this will demonstrate how cheap they are in comparison to Hinkley and other nuclear plants) are. However, even offshore wind will hopefully soon compete with Hinkley, assuming the 3 further CFD auctions are run.
      3. Lightsource are already planning projects in 2016 which are subsidy free – believed to be “behind the meter” schemes. They may also qualify for FiTs which will be a nice bonus but not critical to the success. Other solar companies like Hive, Elgin etc are looking for large scale projects which will supply the grid without subsidy. The greatest risk to such schemes are the changes to English planning policy which seems to be counting against solar – the UK’s best solar resources are in England. In terms of onshore wind, projects are already being planned for a post-subsidy world. These will start to get built from 2017 onwards, once the existing subsidy ends. There continue to be new onshore wind projects proposed. For economic reasons, they are often larger projects. Unfortunately government changes all but rule out new schemes in England, so new developments are concentrated in Scotland, plus also Northern Ireland and Wales. This is not as much of a barrier as it would first seem, as on average England has a poorer resource and denser population.
      4. I agree fully, and were gas prices to get to a level high enough for the industry to “take-off”, alternative energy sources will boom.

      • Karl the brewer

        And therein lies the question. Will the next 3 CFD auctions actually go ahead? Are they obliged to hold them?

        • Bristolboy

          Not legally obliged to hold them and as far as I know it is just based on comments from various people in power, such as Amber Rudd; all the time subject to unspecified “cost reductions” to stay “competitive”. I suspect that therefore means they need to end up below the cost of Hinkley or no CFDs will be awarded.

          • Karl the brewer

            So if renewables such as wind and solar can genuinely compete on a cost basis within the the next couple of years,i know offshore wind already does, what can the Tories do to stop them? Obviously obstruction through planning is one method but are there any others?

          • Bristolboy

            I don’t think offshore wind is anywhere near competing. However, with regards to onshore wind and solar the main thing the Conservative government can do is restrict planning further as most financial benefits have been removed already eg end of the Renewables obligation, noaccess to CFDs, removal of CCL exemption, removal of tax breaks etc. The planning restrictions have already “killed” new onshore wind in England, so it can’t get any worse. Fortunately Labour, Lib Dems, Greens, SNP, Plaid Cynru and the main NI parties support onshore wind and it is highly unlikely the Conservatives will ever win control of the administrations in Scotland, Wales or NI to change their pro-renewable stance – which is good and fortunately the Celtic fringe has a better wind resource anyway. With regards to solar, this is much more concentrated in England, and so if the Tories moved to stop new schemes here it will have a disproportionate affect.

            On the financial side, there are very few changes future changes that could be done. There has been some suggestions that wind (and presumably solar) would have to pay “system balancing costs” and changing use of system charging to account for the fact wind isn’t always “on”, but I believe that plan is no longer seriously being look at. Subsidy free wind farms are likely to have a capacity factor of 35-40%+, and it was pointed out many fossil plants fail to reach this level, particularly peaking plants, and so they would have a higher bill to pay so that was scrapped as it would impact Osborne’s and Rudd’s love of shale and nuclear!

            So, in summary, the Conservatives have done so much in under a year there isn’t really anything else “bad” that they could feasibly do.

          • Karl the brewer

            Thanks for the informative reply. I spoke to a renewables installer on Friday who was actually relieved that they finally have the government out of their hair. His argument was that the uncertainty that they have created was more destructive than the removal of the subsidies and he seemed pretty upbeat to be honest. Let us just hope that the remaining 4 years of this government are it’s last and that supply chains can survive into 2020.

          • Jens Stubbe

            Offshore wind is the only chance for a renewable Britain and the cost challenge is certainly possible to resolve. Best chance for Britons will be to build strong HVDC network to Nordpool and to try to become a member. Then british electricity whole sale prices will permanently drop as Nordpool on average is below $0.03/kWh.

          • neroden

            The Tories are already working heavily on obstruction through planning — they want to prevent onshore wind even where the locals support it, even while allowing water-poisoning fracking to be smashed through the countryside where the locals oppose it.

            The Tories could also copy Rajoy’s evil government in Spain and try to implement a “tax on the sun”.

          • super390

            As an American I have to wonder how much of the money to reward the Tories’ atrocities comes from US sources. I’d heard US “healthcare” corporations sent some money their way to sabotage the NHS.

          • neroden

            A farm of hamsters running in wheels to generate electricity would be cheaper than Hinkley C.

      • Jens Stubbe

        I cannot understand that just at the other side of the North Sea offshore is so much more expensive. The latest auction in Denmark for Hornrev3 ended at Dkk0.77/kWh for nearly ten years and thereafter spot market price for the remainder of the lifetime, which adds up to about $0.06/kWh on an unsubsidized basis or roughly 50% more expensive than onshore. It is the same companies that build the offshore in Denmark and Uk and it is the same turbines that are used and it is in the same sea with roughly the same conditions. For Kriegers Flak there are 8 consortia that are competing and before we got our strange right wing government – yes the one with Lomborg once again a large part of Danish waters was free territory for the same FIT as onshore, which would make the electricity even cheaper than onshore. This was stopped and Fracking permits were given to anyone without local say.

        The North Sea wind resources are so enormous that they suffice to power Europe’s electric grid including electrification of the transport sector.

        • Bristolboy

          It is ridiculous, but onshore wind is also much more expensive in the UK than most other countries in the world including many which have a much poorer resource.

      • egriff5514

        2026 is now earliest for Hinkley… Wylfa needs to get approval for ABWR design by end 2017…

        • Bristolboy

          Where did you get 2026 from? As far as I am aware, EDF continue to “officially” stick to the line of 2025, even though it is widely believed that won’t be met.

          • Jenny Sommer


            They say 10year construction…
            If construction officially starts after financing 2026 is rather optimistic 🙂

          • Bristolboy

            Thanks, I knee it was initially 10 years, however, even after the recent delays the government/DECC and EDF continue to maintain publicly that 2025 remains the target. In reality, much of the heavy groundwork was unlikely to take place until the summer months so it doesn’t matter that much whether FID was in October 2015 or February 2016. If it slips much more though it will definitely be eating in to summer 2016.

          • egriff5514

            sorry, can’t remember – it was in several stories after they missed any go ahead announcement in January 27th board meeting… earliest new announcement date 16th February, which if you consider 2025 was based on announcement ‘within weeks’ of October 2015 must push date 4 months+

    • Matt

      In theory EU and IK are moving toward more interconnect of their grids. WTF is UK going to do with power for Hinkley costing so much?

      • Jenny Sommer

        Well…pay 2-3 times the wholesale price for it 35years till ~2065-2070 and watch it shut down the day after that.

        • Jens Stubbe

          Hmm that will be several factors more expensive than expected electricity wholesale prices as the price is inflation regulated and starts of X4-5 more expensive than average Nordpool spot price. And you are not forced to buy Nordpool electricity when you choose not to!

      • egriff5514

        7.5 GW of HVDC interconnectors in/out of UK by around 2020 – all incoming electricity eligible for capacity support payments. We will be buying in continental renewable surplus on a permanent basis, perhaps?

        • Karl the brewer

          And that would fit with the Tory ethos. Why develop / manufacture something yourself when you can buy it for more money.

  • What is the UK government saying is the logic behind these changes?

    • Richard Foster

      The soundbite is “keeping bills down for hardworking taxpayers” or other bollocks.

      The real reason is fingers in pies from too many Tories and their donors (or actually a great deal of politicians).

      Fracking is supposed to be given a free reign under new proposals to make it a “natural infrastructure project” – meaning they can override local opposition, councils etc as they see fit. A lot of Tory money in Shale gas.

      Basically, the Tories are cockwombles.

      • Bristolboy

        Don’t forget their massive love of Hinkley Point C and other new nuclear projects!

        Despite the claim to “keep bills down”, their changes in many ways will increase costs. For example, they are really pushing nuclear and fracking and pledge to continue supporting offshore wind but are blocking onshore wind and solar.

        They have not only removed all financial support from large scale wind and onshore wind, they have pretty much made it impossible to get permission for new wind turbines in England and have made it harder to get permission for solar farms. Fortunately the UK is more than just England, and whilst financial support is decided centrally, planning is decided by the individual nations and Wales, Scotland and Northern Ireland still support wind and solar, and object to fracking (and nuclear in the case of Scotland).

        Their decisions aren’t even ones the majority of the UK population would agree with – wind and solar are supported by an overwhelming majority, with more opposed to fracking than support it.

    • Coley

      The UK govt has no logic other than keeping their friends in the city happy,,look at the massive subsidies they are looking to give NS oil and gas

      • neroden

        Even large portions of the City (solar investors, anyone who isn’t involved in the nuclear scam) think they’re crazy. This is because Cameron’s Tories are crazy.

    • egriff5514

      Looking behind the scenes, last year’s election was a factor…
      Opposition to wind farms is most prevalent among conservative party voters… also UKIP looked like a threat (and their energy policy was literally written by the GWPF).
      So we came out of the election with a govt which had promised to limit ‘evil’ renewables…
      Then there looked like not being enough money set aside to pay the FITs etc if we carried on at the same rate…
      Then there is Osborne’s nuclear obsession…
      but how on earth does it all fit together?
      Coal is closing quicker than planned (most plant was expected to operate at a lower level of output thru 2016), nobody has taken up the chance to build gas even with more sweeteners, Hinkley is now after 2026 and the end date for most of the nuclear plants is 2023…

  • wattleberry

    If anyone is mystified by the strange reasoning behind this policy I suggest they read a book by 2 eminent political pundits entitled ‘The Blunders of our Governments’ from One World Publishing. I did but wouldn’t necessarily recommend as bedtime reading other than by ministers!

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