The UK’s energy sector has slammed the government over what it has perceived to be a failure for policy action to match its rhetoric.
A letter, addressed to the government, has called on it to follow through on policy promises that would pave the way for decentralised energy to flourish in the UK, warning that the current policy environment is deterring investors and causing projects to be cancelled.
The letter, co-signed by the heads of the Renewable Energy Association, British Electrotechnical and Allied Manufacturers’ Association, Eaton, Kaluza, geo, Good Energy, iBMS and Zenobe, stresses the need for government action in a number of policy areas deemed critical for the transition towards a net zero economy.
While the co-signees have welcomed plans for the small-scale renewables Smart Export Guarantee, set to come into force from 1 January 2020, as well as the much-vaunted aim of establishing the UK as a leader in flexible generation, they argue the rhetoric has not been matched by action.
The letter argues that the removal of embedded benefits for distributed generation, the de-rating of battery storage in the Capacity Market and the removal of feed-in tariffs have stymied the industry, warning that Ofgem’s charging reforms and an increase in VAT attached to residential solar and storage, set to come into effect from 1 October 2019, will cause further damage.
Ofgem’s Targeted Charging Review (TCR) has been the subject of considerable criticism, with the regulator seemingly unwilling to make many concessions from its original proposals despite repeated and concerted lobbying efforts from the sector.
Separate studies released within two weeks of each other earlier this year found that not only would the TCR proposals result in higher consumer bills, but could also delay the onset of subsidy-free renewables deployment and wipe some 6GW from development pipelines.
“This stop-start approach of endless consultation, coupled with regulatory decisions that contradict stated policy, has made the UK a less attractive place for investors in renewable energy infrastructure, with many projects now delayed or cancelled,” the letter writes.
It concludes with a call on new Prime Minister Boris Johnson, arguing that if he is serious about embracing the shift to decentralised energy then the government must “set clearer targets and a roadmap for reform” of the country’s electricity system.
With the government set to return from summer recess next week – albeit temporarily given Johnson’s bid to prorogue parliament – the energy sector continues to wait for the much-anticipated energy whitepaper which is expected to establish the direction of travel for energy policy in the UK.
While it waits, the government has been under continuing attack for the policy vacuum it has created. Just last week the Science and Technology select committee branded policy inaction “unacceptable” and warned that it risked the UK missing its net zero target.