UK plans to cut renewable energy subsidies on solar and biomass plants
The UK Department of Energy and Climate Change (DECC) has announced new measures to cut subsidies of the solar and biomass power plants, to lower energy bills.
As per the new measures, the UK government will end subsidy for coal or other fossil fuel power plants, which convert to biomass and co-firing projects, under grandfathering policy of Renewables Obligation (RO).
The government expects to save £500m per year from 2020/21.
A consultation will also be launched to control the solar PV subsidies of 5MW and below within the RO scheme, for early ending of guaranteed subsidy.
Within the feed-in tariff (FIT) scheme, a consultation will be initiated on changes to initial accreditation rules. This will be followed by wider review for further savings.
The revised measures are expected to provide better control over spending as well as ensure best possible deal for bill payers to support a low-carbon economy.
UK Energy and Climate Change Secretary Amber Rudd said: "We need to keep bills as low as possible for hardworking families and businesses while reducing our emissions in the most cost-effective way.
"Our support has driven down the cost of renewable energy significantly.
"As costs continue to fall it becomes easier for parts of the renewables industry to survive without subsidies."
Renewable technologies are financially supported primarily by subsidies, which are funded through consumer energy bills. The available total amount of subsidies, however, is limited through the levy control framework (LCF).
The new measures come on heels of the UK Government's recent plan to close Renewables Obligation (RO) subsidy regime for new onshore wind power projects from April 2016.