UK May End Renewable Supports

Government launches consultation on feed-in-tariffs.

The British government on Thursday proposed ending feed-in tariffs for new small-scale renewables installations next year, or cutting the remaining budget available, if a support scheme is found to be unaffordable following a consultation.

Britain's Conservative government has been reining in spending on renewable power subsidies since it took power in May.

It will scrap new subsidies for onshore wind farms from April next year and has already announced plans to close support for small-scale solar projects, change the way renewable projects qualify for payments and modify subsidies for biomass plants.

Figures published by the Department of Energy and Climate Change show the cost of renewables subsidies could reach 9.1 billion pounds ($14 billion) a year by the 2020/21 tax year compared with a proposed budget of 7.6 billion.

The so-called Feed-in-Tariff (FiT) scheme was introduced in 2010 to encourage the deployment of renewable energy.

Under the scheme, households, businesses or farms which install low-carbon energy sources such as solar panels or small wind turbines are paid for the electricity they generate and unused energy can be sold to electricity suppliers.

In a consultation report the government said it was setting out proposals for a fundamental review of FiTs, aimed at controlling the scheme's costs more effectively.

"If, following the consultation, we consider that the scheme is unaffordable ... we propose ending generation tariffs for new applicants from January 2016 or, alternatively, further reducing the size of the scheme's remaining budget available for the cap," the report said.

It proposed that the FIT scheme is limited to a maximum overall budget of between 75 million pounds and 100 million from January 2016 to 2018/19.

RenewableUK, a trade association for the renewables industry, said the changes could not be introduced within the timeframe without hurting many businesses investing in new projects.

"The next four months will turn the British energy market into a wild west market with energy consumers stuck in the middle," said Maf Smith, RenewableUK deputy chief executive.

Depending on the views of stakeholders to the consultation, changes could take effect as soon as January 2016, the government said.

By Nina Chestney