Changes to legacy RO and FiT schemes confirmed

The government is pressing ahead with plans to introduce changes to legacy renewables support schemes despite warnings from industry leaders they will damage investor confidence.

In its response to a consultation, the Department for Energy Security and Net Zero confirmed its intention to change the inflation measure used for the buy-out price for the Renewables Obligation and Feed-in Tariff schemes.

From April the lower Consumer Price Index (CPI) measure will be used instead of the current Retail Prices Index (RPI). However, it decided not to proceed with an alternative option of a temporary freeze of the price and a gradual realignment with the CPI.

Although the Government said it recognised that both options carry risks for harming investor confidence, it said it was pursuing the approach which “strikes the most appropriate balance between reducing the cost burden on consumers while maintaining strong investor confidence in the UK’s renewable energy sector”.

Law firm Travers Smith said the change is expected to “be a blow to confidence and cause headaches across the sector”.

“The timing – as Government seeks to encourage a ramp-up in investment as part of its Clean Power by 2030 plan – is unfortunate,” it said.