Government slashes support for small scale energy generation

Energy regulator Ofgem has confirmed that it will cut the payments made to small-scale electricity generators.

The payment will be cut from £45/kw to between £3/kw and £7/kw. The original consultation proposed reducing the benefit to around £2/kw.

Industry advisory panels that recommended the proposals were comprised of mainly large-scale power developers and large utility companies. When the proposed changes were announced small to medium sized developers, utilities, and operators were deeply concerned, as were developers of new flexibility technologies that the Government’s National Infrastructure Commission has in the past expressed support for.

This cut is in addition to the over a dozen negative policy changes that the renewable energy and clean tech industry has endured over the past 18 months.

Dr. Nina Skorupska CBE, Chief Executive at the Renewable Energy Association said: “This ruthless cut will be damaging to the development of next-generation flexibility and energy storage technologies. Additionally, several gigawatts of already installed renewable generation capacity will be negatively impacted. This comes on top of 18 months of damaging and sudden policy changes to the sector which are not only hammering the financial viability of new low-carbon projects, but now the viability of existing ones now too.

“This move will clearly benefit larger, incumbent companies compared to the innovative renewable energy players that have burst onto the market in the past decade.

“This decision flies in the face of where the market is headed. Other nations are actively supporting the deployment of embedded renewable generation and further decentralisation. They see this as leading to a grid that is cheaper, cleaner, and will strengthen jobs and consumers.

“Many manufacturing sites across the country have chosen to strengthen their bottom lines and reduce their carbon footprint by investing in onsite energy generation. Despite Government rhetoric about supporting manufacturing through the Industrial Strategy, these sites too will be impacted by increased costs, potentially in the millions of pounds for larger installations.”