Reduction in subsidies blamed for slow growth in independent renewables

Growth in independent renewable energy projects across the UK slowed in 2017, according to a new report by SmartestEnergy.

The report reveals that the contribution being made by independent generators has continued to increase, but the pace of growth has slowed, with the impact of subsidy cuts and reductions in benefits impacting on investor appetite.

The closure of the Renewables Obligation (RO) scheme to new projects during the year and reductions in Feed-in Tariffs (FiT) over recent years have meant many planned projects are no longer financially viable and have not been taken forward.

However, the report points to renewable sources generating more than three times the amount of electricity than coal during a year which saw carbon emissions fall to their lowest level since the
19th century.

Smaller generators such as farmers and landowners who used renewable projects to diversify their businesses are facing difficulties building a strong economic case for further projects. Farmer-owned capacity increased by just 3% during the year and that of landowners by 5%. However, the number of households with an independent renewable capacity has more than doubled from 3.87m in 2012 to 8.38m in 2017.

SmartestEnergy vice president-renewables Iain Robertson said: ‘The reduction in subsidies has inevitably slowed growth in the independent generation sector but these latest figures underline the significant role energy entrepreneurs continue to play as the UK shifts to a decentralised, decarbonised and digitised energy system.

‘As we enter an era where generators will increasingly be expected to ‘stand on their own two feet’ and operate without subsidies, they will need to become active participants in the new energy system to develop revenue streams.

‘The UK Government recently confirmed a pledge to end the use of coal in power plants by 2025, a fantastic step after more than 140 years burning the fossil fuel. Only seven coal-fired power stations are still in operation in the UK and this is expected to drop quickly ahead of the 2025 deadline as they become increasingly uneconomic to run.’

Independent renewable generation in 2017 (vs 2016):

• 6,809 projects now operating (+6.2%)
• Total renewable generation reaches 13.8GW capacity (+8.2%)
• Investment in renewables is now £2.98bn, up £227m in 2017 (+8.3%)
• 31TWh of electricity generated at a wholesale value of £1.38bn (+8.3%)
• Enough to power 8.38m households (+8.3%)

Read the report here