United Kingdom

United Kingdom

UK trade body considers legal action over possible subsidy cut

UK: The renewables industry would consider taking legal action if the government cuts subsidies for wind power by more than 10%.

UK energy minister Ed Davey
UK energy minister Ed Davey

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RenewableUK could consider taking legal action if the government cuts subsidies for wind power by more than 10%.

The trade body's director of policy Gordon Edge made the comments to the BBC in an interview about the growing political row over subsidies for onshore wind.

The government announced its intention to cut support for onshore wind under the Renewables Obligation by 10% last October.

The rate of the cut was based on the fact that the cost of the technology has fallen as it has matured.

But the issue has become highly political as Conservative party MPs have put pressure on the coalition government to reduce rates further. There have been rumours Conservative chancellor of the exchequer George Osbourne is considering a 25% cut.

"We do expect the government to continue to base its policy on evidence but of course we need to consider what happens in the event that they do not," a spokesman for Renewable UK said.

A decision could be announced next week but similar expectations over the past three months have come to nothing.

Last month, The UK's Liberal Democrat energy minister and Ed Davey signalled he is prepared to resist Conservative demands for a reduction to wind subsidies.

Speaking in an interview with the Financial Times, Davey said: "If we send signals to investors and to companies that we’ll play fast and loose, and we won’t go where the evidence is, we won’t stick to our word, what will happen? The cost of capital for investment in the UK will go up so there will be a political risk premium."

He added: "We absolutely have to be green in this government, and being green means being straight with investors and companies and not messing them around."

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