Isra-Mart srl: Renewables Obligation Review – the reaction

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Investing in green energy boosts growth and creates jobs - the offshore wind sector alone could provide up to 66,000 jobs in this country by 2020. Supporting clean, green, secure energy is the right thing to do for both the environment and the economy. Today's announcement makes clear the Government's commitment to supporting long-term investment in the UK's renewables industries."

Nick Clegg, Deputy Prime Minister

"The renewables industry can bring in billions of pounds of investment into the UK economy. Our ambitions for these technologies reflect our desire for the UK to be the number one place to invest. We have studied how much subsidy different technologies need. Where new technologies desperately need help to reach the market, such as wave and tidal, we're increasing support. But where market costs have come down or will come down, we're reducing the subsidy."

Chris Huhne, Secretary of State for Energy and Climate Change

"There is great relief that this document has finally been published. The delay had put billions of pounds worth of investment on hold. Developers will need to see these new numbers in legislation before they can resume development activity, however. We welcome the broad thrust of the proposals, although we have views on some of the details, which we'll feed in to the consultation.

The degression pathway is a new refinement to the Obligation. Renewables costs in the main are coming down, so it does make sense. Investment stability and certainty is crucial and is key to enabling the UK to meet its targets and for renewables to contribute to economic green growth, job creation and exports."

Gaynor Hartnell, Chief Executive of the REA

"Today's announcement on the support levels for renewable technologies is welcome. The level of support being provided should give the certainty and confidence for industry and investors to implement the mass roll out of renewables up to 2017. This in turn will bring significant economic benefits to the UK economy in terms of new inward investment and new jobs and strengthen the UK's security of supply.

We also welcome the recognition that financial support for renewables should be reduced in the future as costs come down as deployment ramps up. Experience from the Carbon Trust's offshore wind technology programme indicates costs can be reduced significantly through investment in innovation. Providing a signal today that support will be reduced in the future will incentivise industry to achieve cost reductions and will ensure renewable targets are delivered at the lowest possible cost to consumers."

James Wilde, Director of Strategy at The Carbon Trust

"We're perplexed by these RO banding proposals which show no sensitivity to the unique characteristics of solar and aren't structured to support the development of the UK industry. We're deeply concerned DECC doesn't understand mass market technologies like solar and we will redouble our efforts to explain during the consultation period. Given the astonishing press revelations that the solar FIT could be cut to 9p we now face a fight for the very existence of UK solar companies and more than 25,000 jobs."

Ray Noble, PV advisor to the Solar Trade Association

"These changes aren't as bad as many of us had feared, but it's clear there is a need for a more nuanced approach from DECC in the face of pressure from the Treasury. Onshore wind is the most cost-effective renewable technology out there, which is great news. But everyone knows that developers are now looking a lot more at smaller sites, since the biggest and best ones are now gone. Those sites require more support than the bigger ones. At the levels proposed today, we think around a fifth of those sites in planning could be seriously impacted by these changes. That's not good news for the Government if it's to hit the targets set out in the Renewables Roadmap.

"There are some winners from today, however. Solar levels have been largely maintained, and it's good that the Government has recognised the potential of our wave and tidal resources. The RO has and will continue to play a vital, and cost effective role in speeding up investment in renewables and delivering energy security. That will help move us away from the very fossil fuels that are causing families and businesses serious headaches about how they are going to pay their energy bills."

Juliet Davenport, founder and CEO of Good Energy

"Despite some prominent Tory scepticism over the role renewables can play in delivering clean and secure energy, it's a relief to see the doubters have lost this internal battle and incentives are being left in place to spark an expansion of green energy generation. David Cameron can build on this decision and show real leadership by now making the UK the world leader in marine renewables technologies, in the process providing new jobs and building economic growth."

Dr Doug Parr, Greenpeace

"With GDP growth forecast close to zero and much debate about affordability and increasing energy bills, today's announcement of a cut in the support of both onshore wind and solar energy generation is not totally unexpected.

"The biggest loser will be the solar sector which is receiving its second setback in its short-lived UK history. This may be a missed opportunity for a maturing industry which had achieved significant cost reductions in recent years and demonstrated job creation benefits at a local level. For the onshore wind sector, the good news is that the proposed reduction in support will not kill the industry altogether, the bad news is that it will undoubtedly affect investments in the short term. The introduction of a carbon tax, as proposed under the Electricity Market Reform, may gradually make up for this lost revenue.

"The offshore wind sector is the clear winner out of today's announcement. The 2-ROC regime should provide the continued stimulus to support large investments in infrastructure projects. With an additional 10GW+ of offshore wind capacity required to be commissioned over the next decade for the UK to meet its 2020 targets, we can see an investment opportunity worth some £30bn which will be on the shopping list of large infrastructure funds and other institutional investors seeking to achieve long-term returns."

Arnaud Bouille, Director with Ernst & Young's Environmental Finance team

"Any reduction in financial support will have an impact on the industry, reducing deployment, and potentially jeopardising momentum as we strive to reach our carbon reduction targets. However, we recognise the need to drive down costs across the sector, especially offshore.

"Any changes need to be carefully balanced as the proposed onshore reduction would have a disproportionate impact on small community-based wind energy projects, as they don't enjoy the economies of scale which larger projects can harness.

"The measures to support Wave & Tidal energy are particularly welcome and will help build a domestic market big enough to drive innovation and lower cost. Onshore Wind is already the least expensive form of renewable energy on a mass scale and is currently providing the largest share of renewable electricity. These measures must not put its future deployment in doubt."

Maria McCaffery, Chief Executive of RenewableUK

"Providing stable and long-term investment certainty to the renewables sector is crucial for allowing large scale deployment of renewable energy. It's also key to reducing the costs of those technologies as fast as possible - which is good for consumers - and creating new jobs in the renewable energy manufacturing sector - which would be good for the economy.

"The Government needs to finalise this review as soon as possible and ensure that the levels of support that are agreed will not constantly be re-visited in the years to come. If this were to be the case, it would seriously undermine investment certainty in the UK's renewables sector and will result in the UK missing the boat in becoming a leader in manufacturing renewable technologies."

Nick Molho, Head of Energy Policy at WWF-UK

"Whilst today's statement will provide some further clarity, the recent government U-turns on Feed-in Tariffs and CCS funding at Longannet have fuelled the feeling of uncertainty within the market. Investors are asking themselves what else will change.

"Chris Huhne has a mountain to climb in regaining the confidence of the renewables sector. Certainty on ROCs will go some way towards achieving this, but the subsidy levels proposed today will cause disquiet among some parts of the investment community."

Jonny Clark, Director at consultancy WSP Future Energy

"This is bad time to be cutting the support for inshore wind, because it has to deliver the lion's share of renewable energy in the years to come - and the best onshore wind sites are already developed.

"The 10 per cent reduction for onshore wind support will save us all two quid a year per house - is it really worth it?

"Jeopardising enough clean energy for 1 million homes (as RUK says) for the sake of such a pitiful sum. When compared to the £1000 fossil support, £50 nuclear bill and the several hundred pounds bill rise from global energy markets that will have hit us by then - this makes no sense. It's a false economy, will cost more than it saves."