Renewable energy heads slam government inaction

Renewable energy heads were dismayed by a speech given by energy minister, Mike O’Brien, yesterday and accused him of leaving the future of renewables firms hanging in the balance.

Instead, the minster asked industry to trust that government was listening to their concerns and would make an announcement shortly.

“As part of the work we are doing across government on the low carbon industrial strategy, we are looking at the impact of the downturn and what we can do to alleviate it.,” O’Brien told a Renewable Energy Association (REA) conference on feed-in tariffs. “To that end, we are examining how we can help ensure there is sufficient finance and other support available for viable projects which are short of the investment they need.”

The REA, which represents the interests of the industry, had hoped that Mr O’Brien would announce measures to tide over the industry through the credit crunch until tariffs are introduced from next April.  

But O'Brien aid it would be a mistake to accelerate the current consultation process for feed-in tariffs.

"We have in the past made the mistake of announcing things without the proper process of consultation. We need to get the policies right," he said, adding that the government was "still looking at steps we can take before the introduction of feed-in tariffs."

All sectors of the industry, from manufacturers of solar PV to installers of large wind energy schemes facing financial problems as both project finance and development dry up.

"We can't afford to take a gap year in tackling climate change," said Philip Selwood, chief executive of the Energy Saving Trust. "From what we've just heard, that's still not a message that's being well received in government."

Jeremy Leggett, chief executive of Solarcentury said the situation was worse than that.

"It is not a 'gap year' - it is a death year. How would it be if you then bring in a feed-in tariff and it's just the Germans and the Chinese left to come in and pick it all up?"

Yesterday, the world’s largest investor in wind farms, Iberdrola Renovables said it was planning to cut its investment in UK renewable electricity by 40% year-on-year. And Europe’s largest wind farm, the London Array, is in trouble since Shell pulled out of the £3b scheme last year.

The Low Carbon Building Programme which is the largest current source of funding comes to an end in June.

A spokesman for the Department of Energy and Climate Change (DECC) later promised more clarity on funding and finance for industry in a couple of weeks.

O’Brien insisted that government would meet the target of sourcing 15% of energy from renewable sources by 2020. The figure stands at 5% today.