Who will complain if their energy bills go down or at least rise at a slower rate, when ‘out of control subsidies’ are cut or abolished?
Subsidies for new wind farms and solar power plants are set to be cut as ministers move to protect millions of families from rising energy bills, says the UK Daily Telegraph.
The government is expected to announce the decision this week, after official figures revealed that so-called “green” energy schemes will require £1.5 billion more in subsidies – paid for by customers – than originally planned.
If left unchecked, the rising costs would mean every household in the country would be forced to pay an estimated £160 to £170 a year by 2020 to support renewable electricity developments.
However, Whitehall sources said the subsidies – under the so-called Levy Control Framework – could be reduced, or the scheme closed early. Details of the how the subsidies will be curbed are still being finalised.
After the Conservatives won a majority in May, ministers announced that subsidies for new onshore wind-farms would close a year early. Similar action could now follow for subsidies given to help build new offshore wind projects and solar farms.
Ministers want renewable energy schemes to become economically viable without the use of subsidies.
The coalition decided that investment in renewable energy would be paid for by energy companies, rather than through taxation. Firms were allowed to recover the cost of these subsidies from their customers by adding it to household bills.
The huge projected rise in spending is thought to result from higher-than-expected numbers of rooftop solar panels being fitted on houses, falling wholesale energy prices, and offshore wind farms proving more productive than anticipated.
A source at the Department for Energy and Climate Change said Amber Rudd, the Energy Secretary, : “Amber is determined to get a grip of these out of control subsidies and make sure that hardworking bill-payers are getting a fair deal. These demand-led schemes have been allowed to spiral out of control for too long and Amber has made clear to the Department that this can’t and won’t continue. The public is in favour of action to cut carbon, but not at any cost and the bottom line is that subsidies should help industries get off the ground, not be relied on indefinitely. We’ll continue to meet our environmental commitments and power our economy with clean energy, but in a way that keeps costs under control and doesn’t leave consumers paying over the odds for green projects