LONDON (Alliance News) - The UK government, which has introduced some controversial decisions concerning renewable energy since the general election in May, is struggling to pay for new clean energy supplies which could result in a rise in household bills or a major cut in investment in renewable technologies, the Guardian newspaper reported Thursday.
Citing senior sources, the Guardian said the Department of Energy and Climate Change has already overspent its budget to support renewable energy projects over the next five years by GBP1.50 billion, meaning the UK could struggle to meet legally binding commitments to reduce greenhouse gas emissions.
A Whitehall source told the Guardian the projected overspend on renewables had become the single most important problem for the ministry as it tried to balance its books. Sorting this out is a number one priority, but it is a dilemma. It really is ?answers on a postcard? time,? the source said.
http://www.theguardian.com/environment/2015/jul/16/uk-running-out-of-money-to-pay-for-clean-energy
Meanwhile, the Telegraph on Thursday, citing a think tank, said the UK government had been "reckless and wasteful" in spending consumers' money on green energy subsidies, a leading think tank has said, urging the government to slash "excessive" payments to households who install rooftop solar panels.
The Telegraph claimed household energy bills have risen GBP120 per year as a direct result of ?ill-thought-through? climate change policies and the costs of running energy networks ? together accounting for half the total bill increase over the period.
Subsidies for green energy are allocated by the government but paid for through energy bill levies. They are subject to a Treasury-set spending cap, but the Department of Energy and Climate Change has exceeded the cap in each of the last three years and is likely to do so again, the Telegraph said in agreement with other media stories.
http://www.telegraph.co.uk/news/earth/energy/11742637/Government-reckless-with-consumer-cash-for-green-energy.html
It may help explain why the UK government has made some anti-renewable decisions in recent months, including Chancellor George Osborne's decision to scrap the "out-dated" climate change levy, which was introduced in 2001 with the aim of improving energy efficiency and increase demand for renewable energy.
That caused renewable companies' shares to fall, most notably Drax Group PLC after it warned earnings would be GBP30 million lower in 2015 and GBP60 million lower in 2016. Wind operator Infinis Energy was also hit by the changes alongside a band of smaller companies.
In June, the UK government said it will sell a stake in the Green Investment Bank over the next years, three years after the unit was established in order to invest in long-term energy and infrastructure projects in Britain. That sale is expected to see the government cut its stake in the bank by at least half.
Also in June, the government said it would scrap the Renewables Obligation which is the primary of three subsidies for onshore wind farms, claiming the country has enough onshore wind in the pipeline.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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