Rudd stalls on CfD timing, content
UPDATE: Industry calls government's onshore wind decision 'illogical'
DECC secretary Amber Rudd has warned that an announcement on the future and substance of the Contracts for Difference mechanism would be a “little while yet".
The minister told the Energy and Climate Change Committee that discussions are ongoing "and I will be making an announcement” but could not provide a timeline.
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She refused to be drawn on when or if there would be a second CfD round, saying: “I can’t confirm that."
Rudd did confirm to the committee that the CfD is being developed without onshore wind. “I will say that onshore wind will not be a part of future CfD rounds (as) our manifesto confirmed a commitment to end these subsidies."
She said the technology deployed faster and required more subsidy than is available.
"It was right for us to step in on behalf of consumers and make sure that didn’t get any higher. I appreciate it was disappointing for developers and those depending on it, but not a surprise,” she said.
RES Group managing director, Western Europe Gordon MacDougall ? said on behalf of the British Wind partnership: “If followed through, this would be a completely illogical step that severely undermines the credibility of UK government energy policy.
“Blocking out the cheapest technology will mean UK bill-payers, the vast majority of whom actually support onshore wind according to the Government’s own stats, will be forced into spending hundreds of millions of pounds extra every year on far more expensive energy technologies.
“The prospect of competitively priced renewable electricity will be pushed even further into the future and more families will be forced to pay higher bills – a far cry from ‘we’re all in it together’. This move would clearly be anti-competitive and will further discriminate against independent competition to the Big Six in the market, driving up costs even further.
“As the Secretary of State pointed out, in the future we can deliver onshore wind subsidy free, but to do so we need market access through the Contract for Difference which is not a subsidy.”
Rudd added: “As the Renewables Obligation and Feed in Tariff goes, we will be making an announcement shortly in order to clear up for the industry just what will be available. We are conscious we need to give more certainty.
“It is taking more time to work out how it will work, we are looking at what is in the pipeline, how far deployment has gone on some projects, all while keeping an eye on consumers bills.”
Rudd added that ending subsidies for onshore wind was “vital” to stop an over spend of more than £2bn on the Levy Control Framework.
“The consumers are our priority,” she said. “We fund our subsidies through the LCF. We had a commitment with LCF that we would not go higher than £7.6bn in 2020/21. When I entered the department it became apparent we were looking at £9.1bn to 2020/21."
The session – held in The Wilson Room in Portcullis House, Houses of Parliament - was set up to explore a number of themes including an overview of DECC’s strategy and policy decisions, the government’s plans to meet long-term renewables and decarbonisation targets and energy security.
“It has been 10 weeks since I took the role of Secretary of State and we are looking at three key areas. One, ensuring we keep the lights on, two, keeping the bills low and, three, focussing on carbon reduction commitments.
“Hitting carbon reduction targets is more essential in my eyes than hitting renewable targets.”
Rudd said it was important all technologies are weaned off supports. “Subsidies are important part of renewable energy but the intention is that subsidies don’t remain, we don’t want them to be long term answer. We want to get it going then have the state step back.”