Richard Goodfellow, Partner and Head of Energy and Utilities Markets at Addleshaw Goddard, has warned that the UK feed-in tariff for renewable energy will end in April 2019 – when the UK leaves the EU bloc.
He said: “While we had hoped that the Budget might set out some clear energy policy decisions, it seems the government’s focus is elsewhere – Brexit.”
Investors have been asking for certainty about what happens after the Levy Control Framework (which controls how much can be levied from consumer energy bills to support low carbon electricity projects) comes to an end in 2021.
A supporting document, Control for Low Carbon Levies, confirms that there will be no new low carbon electricity levies until the burden of such costs falls, which on current forecasts will not be before 2025.
Existing commitments under the Renewables Obligation, Feed in Tariffs and Contracts for Difference will continue to be honoured, as will the up to £557 million promised for future Contracts for Difference rounds.
But he added: “But there won’t be any new levies unless the aggregate of existing levies is forecast to have a sustained and significant fall in real terms; or new levies will have a net reduction effect on bills.
“This gives some comfort to investors as at least they now know where they stand for the next few years.
“But buried in a table in an Annex at the back of the supporting document is the worrying statement that the Feed in Tariff will close in April 2019 – mark that date in your calendars.”
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