The UK’s energy secretary Amber Rudd has declared an overhaul of renewable energy subsidies, while at the same time defending the government’s decision to champion nuclear power.
Speaking on the BBC, she said, "We can't have a situation where industry has a blank cheque and that cheque is paid for by people's bills."
The plans include closing support for small-scale solar projects a year early, changing the way renewable projects qualify for payments and modifying subsidies for biomass plants.
Figures published by the Department of Energy and Climate Change (DECC) show the cost of renewables subsidies could reach £9.1bn a year by the 2020/21 tax year compared with a proposed budget of £7.6bn.
Meanwhile the news for the nuclear power sector was more positive with Ms Rudd telling the energy select committee she expected the Hinkley Point project to be decided on soon: “We hope the decision will be made later on this year. We are very committed as a government to making sure that we build new nuclear and Hinkley Point will be the first of those.
“Old nuclear is coming off and I think we need as much investment as we can procure in order to support new nuclear.”
Negotiations are still ongoing, with investments from Chinese nuclear partners yet to be finalised and financial turmoil at reactor-maker Areva adding to problems.
Ms Rudd told MPs: “This is going to be the first new nuclear plant in over 20 years so it is essential to me that we succeed in it.”
A legal challenge from Austria to the EU’s state aid approval for Hinkley subsidies, while “very unwelcome”, was not expected to affect the final investment decision being taken later this year, she said.
She added there was no regrets at the price agreed for the project, saying that other nuclear projects would come in cheaper. “We have to have secure base-load, so you should not be surprised that we are prepared to pay more for that in order to ensure nuclear is part of the mix. The requirement for nuclear is absolute,” she said.
Meanwhile Leonie Greene of the Solar Trade Association expressed disappointment with the effect changes will have on the solar sector.
“There is no pledge in the Conservative manifesto about cutting support for solar, so we are disappointed by this move. Solar is the nation’s most popular form of energy, as the government’s own opinion polls have shown.”
“We also regret this move because solar farms are close to competitiveness with new gas generation and they account for a very small proportion of expenditure on the Renewables Obligation. Support for solar under the Renewables Obligation currently costs just £3 per year on each household bill, and solar on makes up only 6% of the Renewables Obligation budget."