Removal of FiT preliminary accreditation despite 0.6% support

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News article

September 2015

renewable energy news

The fears of many stakeholders in the UK renewable energy marketplace were partially realised on 9 September 2015 when the Department of Energy & Climate Change (DECC) confirmed the Government’s decision to remove pre-accreditation under the Feed-in Tariff (FIT) scheme.  This will take effect from 1 October 2015.

The move follows the consultation that ran 22 July 2015 to 19 August 2015 outlining changes to control spending under the Levy Control Framework and relieve pressure on consumer energy bills.  This was one of a series of consultations launched by the Government in recent weeks that has severely de-stabilised the UK’s renewable energy market.

The Government claims the removal of pre-accreditation will help achieve its core objectives by “limiting the value of the deployment surge in response to tariff reductions” – in turn satisfying the affordability of the criteria put forward in the FIT Review consultation.  The consultation response refers repeatedly to a possible re-introduction of pre-accreditation at a later date, but with officials fearing its £1.5 billion budget will be surpassed by 2020, this appears to be a false hope.

Darren Edwards, a Partner at leading renewable energy consultants Fisher German, says: “The Government’s decision to consider and implement various cost-control measures in isolation and quick succession following May’s election has proven extremely unhelpful to the whole renewable energy industry.  From planning policy changes to the removal of Levy Exemption Certificates to the ending of pre-accreditation for FITs, they have all played a part in adding to the uncertainty, not to mention the most recent FIT Review consultation launched on 27 August outlining severe tariff cuts from January 2016.  The cumulative impact of these announcements has been and is profound and will not only affect future projects, but current and recently permitted projects too, some of which will now struggle to obtain funding.  This will leave many farmers, landowners, developers and investors out of pocket – some substantially.  In a short space of time the Government has put the renewable energy industry in a very dark place, something that it could come to regret as conventional power stations the country has come to rely upon – such as Eggborough which produces nearly 4% of the UK’s power requirements – are taken offline.

Mark Newton, head of Fisher German’s renewable energy sector adds: “This is going to make it much more difficult for farmers to get bank finance without the certainty of pre-accreditation, which is required due to the long lead in time for many renewable projects and the high risk of the FIT payment dropping further. I wonder why the Government have these consultations as only 16 out of 2,400 respondents supported the proposal which is 0.6% and yet they still implement it !”.

For further information, please contact Mark Newton on 01858 411215, or Darren Edwards on 01858 411236.

Click here to read more about our Renewable Energy sector.

 

 

Removal of FiT preliminary accreditation despite 0.6% support

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