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UK to replace Levy Control Framework

Author: Images Money. License: Creative Commons, Attribution 2.0 Generic.

March 9 (Renewables Now) - The UK will replace the Levy Control Framework (LCF), which sets limits on the costs of subsidies for low–carbon electricity, with "a new set of controls," Chancellor Philip Hammond said in his Spring Budget 2017, presented on Wednesday.

The budget contained no details of the new controls, beyond specifying that they will be outlined later in the year. The LCF sets budgets for low-carbon support schemes until the 2020/21 fiscal year.  

The budget also said that details on carbon prices for the 2020s will be set out in the Autumn Budget 2017.

The Renewable Energy Association (REA) criticised the lack of clarity around the future of these two policies, saying it is making it hard for developers to plan for new clean energy projects into the 2020s. 

"This budget has created new uncertainty around the levy control framework beyond 2021. The industry was expecting an announcement regarding the future budget levels and structure but this has been delayed and instead we face a new regime and no clarity on the proposed new "set of controls," said James Court, head of policy and external affairs at REA. According to the association, the budget will keep the renewable and smart technology sectors in limbo.  

RenewableUK, a trade body for the wind, wave and tidal energy industries, said it is keen to work with the government on the new controls. Its executive director Emma Pinchbeck noted that building energy infrastructure is a timely business and that projects considered today will be operational in the 2020s, after the period covered by the LCF.

"We need to ensure that developers and investors in wind, wave and tidal energy projects have certainty so that projects can be built, economic returns can flow and consumers can benefit from the low cost of renewables," added Pinchbeck.

The Solar Trade Association (STA) was disappointed that the Chancellor did not say he will drop business rate hikes of up to 800% on organisations using their own rooftop solar. The STA has been campaigning against the rate hikes for months. It said it will now turn to parliament on the matter.

The STA also expressed disappointment at the delayed decision over the carbon floor price and that the announcement on replacing the LCF gives no clarity to solar power, which has been shut out of auctioning.

"Government continues to cherry pick more expensive technologies while shutting solar out of competitive auctions, even as its industrial strategy prioritises cheap power," said chief executive Paul Barwell.  

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Browse all articles from Plamena Tisheva

Plamena has been a UK-focused reporter for many years. As part of the Renewables Now team she is taking a keen interest in policy moves.

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