The British Department of Energy & Climate Change (DECC) has announced a revision of renewable energy subsidies, in order to limit the growth of costs. The total amount of subsidies available is capped via a mechanism called the Levy Control Framework (LCF).
Measures announced by the DECC include the removing of the guaranteed level of subsidy for biomass conversions and co-firing projects for the duration of the Renewable Obligation, known as grandfathering. The DECC will also launch a consultation on controlling subsidies for solar PV of up to 5 MW under the Renewables Obligation (RO); this includes consulting on early closure and removing the guaranteed level of subsidy for the duration of the RO. The DECC will also start a consultation on 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. It will set out totals for the LCF beyond 2020, providing a basis for electricity investment into the next decade and set out its plans in the autumn 2015 in respect of future CFD allocation rounds.
The total expected cost of renewable support in the UK is expected to nearly triple between 2014-15 (£3.54bn, or €4bn) and 2020-21 (£9.1bn or €10.3bn): the costs of the Renewable Obligation will soar from £2.8bn (€3.2bn) in 2014-15 to £4.8bn (€5.5bn) in 2018-19 (stable afterwards), while the cost of FiTs will rose from £740m (€842m) in 2014-15 to £4.6bn (€5.2bn) in 2020-21 and that of CFDs from £5m (€5.7m) in 2014-15 to £2.66bn in 2020-21 (€3bn).
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