ECCC chair calls for NAO investigation of renewables subsidies

The chair of the energy and climate change select committee, Angus MacNeil, has called for a National Audit Office investigation into renewables subsidies.

Speaking exclusively to Utility Week, MacNeil said subsidies may be having the opposite effect to that expected, and actually lowering energy bills.

He said: ““If the bill payer was not paying levies to support [renewable generation], there is an argument they would be paying more because the wholesale price wouldn’t be so low.

“What is not clear is whether that effect is greater, less, or the same as the cost of the levies. That’s a job for the NAO to determine.”

MacNeil added that while renewable generation costs a lot to develop and install, once up and running it costs “almost nothing”.

He said: “[Renewable generators] are dumping it – and they are dumping it – on the market, which is further lowering the price.

“The NAO should look into whether the Levy Control Framework is effecting the wholesale price and having a knock-on effect on bills.”

Renewables’ share of electricity generation was 23.5 per cent in the third quarter of 2015, largely due to favourable weather conditions. This is expected to increase to 30 per cent by 2030 as the UK seeks to hit its climate change targets.

The government is pressing ahead with plans to remove new Renewable Obligation subsides for onshore wind one year earlier than planned, while solar generation has already seen its support scaled back.

Energy secretary Amber Rudd said the cuts to renewable subsides will save consumers up to £200 million a year, while the target of 11-13GW by 2020 of renewables will still be met.

Read the full interview with MacNeil in this week’s issue of Utility Week, and online from Friday