On Eve Of Paris Climate Summit, Britain Sends Out Warning On Cost Of Renewable Energy
“We are reaching the limits of what is affordable and what the public is prepared to accept,” Britain’s Secretary of State for Energy and Climate Change told Parliament when she announced cuts in green energy subsidies.
With breathtaking abruptness, the British government has in recent months slashed its support for solar power and other renewable forms of energy, leaving a once-promising industry with grim prospects and throwing into doubt the country’s commitment to clean power.
The moves have baffled environmentalists, business leaders and even many government allies. Britain has long been in the vanguard of efforts to combat global warming. It has been expected to play a leading role — alongside the Obama administration — in efforts to secure a package of tough reforms at the U.N. climate change summit in Paris, which kicks off at the end of this month.
But the decision to cut hundreds of millions of dollars’ worth of support for renewable energy at home, with a planned 87 percent reduction in subsidies for solar power, threatens to undermine Britain’s international authority, while showing just how difficult it can be for a developed nation to break a centuries-long addiction to fossil fuels.
“Britain’s been leading the way for years,” said Frans van den Heuvel, chief executive of Solarcentury, the company responsible for the pro bono installation of the Tate’s rooftop panels. “But now the government looks like it wants to kill the industry before it can stand on its own two feet.”
Britain on Wednesday became the first major economy to propose a phase-out of coal-fired power plants, saying it intends to do so by 2025. But the government’s plan relies heavily on a switch to gas rather than cleaner alternatives.
Despite its support until now for alternative sources, the United Kingdom still ranks close to the bottom of the European Union in its use of renewables. In 2014, it used fossil fuels to produce more than 60 percent of its electricity, half again as much as the E.U. average. Nuclear power accounted for an additional 19 percent.
It’s not just the subsidy cuts that are hurting renewable energy in Britain. Cheap fossil fuels have made it tough for solar and wind to compete, even as the technology behind green energy matures and costs tumble. Van den Heuvel estimated that solar power is at least several years away from matching the price of more conventional fuels.
But time may be running out: The International Energy Agency reported last week that despite progress toward cleaner energy, the world still requires “a major course correction” to avoid a potentially catastrophic 3.6-degree Fahrenheit rise above average temperatures last seen in the 19th century, when coal-fired Britain launched the world into the industrial era.
Britain is not alone in reducing support for renewable energy. Countries across the West are weaning those industries from the subsidies that have made them competitive with dirtier fuels such as oil, gas and coal. Germany and Spain have scaled back ambitious incentive programs, citing higher than expected public costs. The major tax credit for solar power in the United States is due to expire at the end of next year.
In most places, however, the process has been gradual and somewhat predictable, giving businesses the chance to adjust.
In Britain, the changes have been dramatic and came with little warning. As other countries bolster their green commitments in the run-up to Paris, a top U.N. scientist last month singled out Britain for sending “a very perverse signal” by eliminating support for onshore wind energy and proposing to slash solar subsidies by nearly 90 percent.
The government has been vague about likely savings, but officials say cuts will help to significantly reduce a projected $2 billion cost overrun in the renewable energy incentive program over the next five years.
But the moves could also mean hundreds of thousands fewer green-energy installations. As customers have canceled orders and investors have fled, British renewable energy firms have laid off workers or redirected them to projects overseas. Several have gone bust this fall.
“There’s no better way to disrupt an industry than to create constant uncertainty,” said Howard Johns, whose firm, Southern Solar, went bankrupt last month. “And that’s exactly what we’ve seen.”
Government officials say the time had come to allow renewable energy firms to live or die on their own.
“We have a duty to protect consumers and keep bills as low as possible while we reduce emissions,” said the energy secretary, Amber Rudd, in a speech explaining the moves. “Decarbonization has to be sensitive to the impact it has on people’s pockets.”