On 18 June 2015, the Department of Energy & Climate Change announced that it will close Renewables Obligation for new onshore wind projects on 1 April 2016, a year earlier than planned. Only projects which have secured grid connection offers, planning consent and land rights will have a grace period during which they will still be able to qualify for Renewables Obligation Certificates (ROCs) beyond this date.
New primary legislation will be introduced with details of the closure. The government also announced that it wishes to review the Feed in Tariff (FIT) scheme later this year.
What does this mean for Triodos Renewables?
The government's announcement was discussed at the Triodos Renewables AGM on Friday 19 June 2015. The board explained to the attending shareholders that the existing projects in our portfolio will not be affected by the government's decision, as the company's upcoming projects have already qualified for ROCs. However, this decision may impact on our future investment strategy.
Impact on investment strategy going forward
In the next 12 months Triodos Renewables will only consider onshore wind projects which will qualify for either ROC, FIT or CFD (Contract for Difference). We will also continue to consider the variety of investment opportunities which exist in sustainable energy. These options include the sale of electricity directly to local industry and community projects. We will also consider technologies such as hydro-electric, solar PV, energy efficiency and demand side management.
Decisions will continue to be made in line with the objectives of achieving the greatest impact, taking acceptable risk and maximising shareholder returns. We also hope that the government will continue their commitment to renewables and that the Contracts for Difference scheme will still be opened for onshore wind projects.
As the government remains committed to achieving its greenhouse gas emission reduction targets, onshore wind remains the cheapest way to do so. If the playing field was levelled, and subsidies were removed from the fossil fuel industry, we are sure that wind, hydro and solar energy would be the least cost source of energy, with the ability to address security of supply issues.
We will continue to contribute to cleaning up the UK’s energy system, but this latest step may slow the sector’s progress and ultimately cost the country more as we under-utilise one of the country’s greatest natural resources.
Find out more about the changes from the Government's web site: