Tuesday, 25 October 2011

UK renewable energy subsidies slashed

Public subsidies for a range of renewable energy technologies are to be cut under plans unveiled by the government on Thursday, as ministers respond to complaints of "green taxes" driving up energy bills.

Power stations using biomass from plants or waste byproducts to generate energy are among the worst losers, with developers disappointed that their subsidy levels have been left at a level they say will not encourage new projects.

Companies generating energy from landfill gas will cease to receive any subsidies at all. Projects to produce energy from waste will have their subsidies slashed, and hydroelectric power will receive only half the subsidy it used to.

Gaynor Hartnell, chief executive of the Renewable Energy Association, said: "If the government wants to encourage a greater contribution from the very cheapest technologies, this is the wrong way to go about it. No new projects have been built since 2009, at the existing levels. Reducing them further cannot help."

The savings from the subsidy cuts are likely to be small – they could be as little as £400m at the lower end, and no more than £1.3bn.

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