UK announces policy changes

By Erin Voegele | September 25, 2015

The U.K. government announced two policy changes in July that could impact the bioenergy sector. In early July, the U.K. announced it would remove the Climate Change Levy exemption for renewable electricity generated after Aug. 1. The levy is essentially a tax on energy collected from certain entities.

The move is expected to impact Drax and other renewable energy producers in the country. The U.K. Renewable Energy Association said it has concerns the removal of the Climate Change Levy exemption for renewable electricity will impact all renewable and low-carbon generation for its members.

Later in the month, the U.K Department of Energy and Climate Change announced changes to grandfathering provisions for biomass cofiring and conversions under the Renewables Obligation.

According to the DECC, it is removing the guaranteed level of subsidy for biomass conversions and cofiring for the duration of the RO, known as grandfathering. Under the grandfathering policy, once a generating station is accredited and receiving RO support at a certain level, that level will not change for the lifetime of its support under that scheme. However, exceptions are expected to be provided to protect those who have already made significant financial commitments.