After delay and controversy, DECC has announced the RO banding conclusions (1). Renewable power now set to deliver jobs and growth but uncertainty remains in several areas.

Martin Wright, Chairman of the REA (2) said: “We welcome the publication of the RO Banding decision, but it is not before time. Government has re-affirmed its commitment to the renewables industry, but we are concerned about the further reviews facing many technologies, which is likely to inhibit investment.

“Business confidence is essential to realise the vast potential of this industry, in which the UK still lags behind the rest of the world. Companies will not invest without stable Government policy delivered in a timely manner. At such a critical time for the economy, this country cannot afford any further political wrangling that puts at risk future investment and job creation.

“The Chancellor’s recent letter (3) to the Energy Secretary showed a serious misalignment between the attitude of Treasury and other Government departments charged with delivering a growing, low carbon economy. The Treasury appears to be frustrating the creation of a comprehensive energy policy for short-term economic and political gain. It is time energy policy properly reflected the long-term interests of the nation.”

UK renewable electricity generation is currently at 11% (4), but to meet the Government’s overall renewable energy target, it will need to reach to 30% by 2020. Significant amounts of wind capacity are in construction or have won planning consent, but more is needed, along with contributions from baseload biomass and energy from waste (EfW) technologies. With the costs of PV falling so dramatically, it also makes financial sense for solar to play a major role in meeting our targets.

The REA will strongly oppose the proposal to consult on removing FIT-eligible technologies from the RO under 5 MW.

•Firstly only one AD plant in the UK is over 5MW (out of the 22 currently supported by the RO). Removing sub 5MW AD from the RO would therefore slash the budget. The ambitions for AD under FIT are already very low.

•It would be financially illogical to constrain solar PV to the FIT, which has a much smaller budget than the RO. Many solar applications are already cheaper than other technologies but the expansion of cheaper solar would be constrained if this were to happen.

Gaynor Hartnell CEO of the REA said:

“After a long wait there are some disappointments in the Banding levels announced today. There is good news for hydro, advanced pyrolysis and gasification and EfW. However, we are effectively left with no deep geothermal power industry in the UK, inadequate incentive to capture methane from landfill sites and the prospect of a further review for onshore wind.”

Notes to Editors

1. DECC: ‘Renewable energy to bring £25bn of investment into UK economy – Davey’, 25th July 2012. Available at: http://www.decc.gov.uk/en/content/cms/news/pn12_086/pn12_086.aspx

2. The Renewable Energy Association represents renewable energy producers and promotes the use of all forms of renewable energy in the UK across power, heat, transport and renewable gas. It is the largest renewable trade association in the UK, with over 900 members, ranging from major multinationals to sole traders. For more information, see: www.r-e-a.net

3. The Guardian: ‘George Osborne letter to Ed Davey on gas and wind power’, 9th July 2012 (reproduced 23rd July 2012). Available at: http://www.guardian.co.uk/environment/2012/jul/23/george-osborne-letter-ed-davey-gas-wind?newsfeed=true

4. DECC: ‘Statistical press release: UK energy statistics’, p. 8, 28th June 2012. Available at: http://www.decc.gov.uk/assets/decc/11/stats/publications/energy-trends/5626-pn-12076-energy-stats.pdf

5. Ofgem: ‘Updated household energy bills explained’, p. 3, 31st May 2012. Available at: http://www.ofgem.gov.uk/Media/FactSheets/Documents1/household-bills.pdf