REA sends open letter to Number 10 urging clarity on renewables growth and support
Over 200 diverse organisations have signed a letter to PM David Cameron and DPM Nick Clegg asking them to ensure their government provides clear and consistent leadership on renewable energy.
The letter follows growing concerns about the slow pace and complexity of DECC’s policy framework and a series of interventions by the Treasury, creating confusion about Government objectives and leaving key renewable power technologies without the clarity they need. The recently published Renewables Obligation (RO) Banding document was meant to define support levels for renewable power technologies until 2017 . However, onshore wind, solar power and anaerobic digestion now have a year or less of forward visibility.
Martin Wright, chair of the REA said: “The decisions for renewable power were late and raised more questions than they answered. Renewables must not be treated like a political football, kicked between DECC and Treasury. Government shouldn’t squander this once in a generation opportunity to transform our energy system into one fit for the future, with all the jobs and inward investment this will bring.
“It’s a measure of our frustration with the pace of policy making and its lack of direction, that we are writing this open letter to the Prime Minister and Deputy PM. The UK is lagging behind virtually all other countries on renewable energy. This Government needs to start living up to its Coalition Agreement, and its promise to be the greenest ever.”
Illustrating the strength and breadth of support for the renewable energy agenda, the letter has been signed by signatories as diverse as investors Novusmodus and Climate Change Capital, the TUC’s Frances O’Grady, the University and College Union, the NFU, environmentalist Tony Juniper and major companies npower renewables and Fred Olsen.
The letter has also been signed by several associations, from the REA and Solar Trade Association to the UK Sustainable Investment and Finance Association and the Country Land and Business Association.
REA chief executive Gaynor Hartnell said: “The reasons for doing renewables have evolved over the decades. Right now we are on the cusp of pure economics being the main driver. Even the least developed renewable technologies are on a par with carbon capture and storage and nuclear power, and in fact most renewables are significantly cheaper. Our leaders must see the sense in this, and ensure the UK is not left behind.”
The REA’s assertion that the government is failing to understand the economic benefits of renewables investment is supported by analysis from Lord Stern and his colleagues at the Grantham Institute. Writing in REA News, Lord Stern and his colleagues stated: “Costs are not saved and investment is not promoted by procrastination”, and that the transition to a low-carbon economy, with good policy, could be “intensely creative and full of opportunity.”
Recent Ofgem figures show energy bills have risen £200 in the past two years. Recent energy bill increases have been largely driven by fossil fuel price rises while support for renewable power added just £22 to household energy bills last year. However, the chancellor equated renewable energy with expense in his 2012 budget and has sought to constrain investment in renewables.
Paul Monaghan, head of social goals and sustainability at The Co-operative Group, who signed the letter, said: “In many ways, the current situation is the worst of all worlds. Investors continue to have no clarity as to whether the government has any real appetite for renewables – and are left to interpret the various leaks and letters that pass across the back-benches. There is a tremendous willingness in the private sector to take forward the low carbon economy, but we need the Government to act in a fair and consistent manner.”
There will be no targets for renewable energy for 2030, yet research by the European Commission shows investment in renewable energy will slow near 2020 without further targets. The Chancellor also asked for powers under the Energy Bill to terminate the FITs scheme. However, the FITs scheme has delivered dramatic cost reductions for renewable energy. Furthermore, the FITs scheme provides a return on investment for everyday investors, lower than returns demanded by utilities.