United Kingdom renewable energy policy framework summary

In 2015 and 2016, there have been a number of changes to renewable energy policies in UK.

Targets and progress

Under the EU Renewable Energy Directive (RED), the UK has a target to source 15% of final energy consumption from renewable energy by 2020. The UK exceeded its 2013/14 interim target under the RED with a 6.3% share of renewables versus its 5.4% target. However, according to the European Commission’s 2015 RED progress report, the UK is projected to fail meeting its 2020 target.

While deployment of renewable electricity capacity has progressed rapidly, renewable heat and transport continue to lag behind. In 2015, almost 25% of electricity was generated from renewables, a rise of almost 30% from 19% in 2014. Renewables accounted for 4.5% of heat and 4.9% of transport demand in 2014 (most recent data available).

Policy changes

Recently, there have been a number of significant changes to renewable energy policy instruments in the UK which will have an impact on deployment levels.

Feed-in tariffs (FITs)

FITs support small scale renewable electricity installations and there has been rapid deployment of solar PV in recent years due to attractive support tariffs. The Government became concerned about the cumulative cost of the scheme and in early 2016 implemented tariff cuts of 65%. As a result solar PV installations plummeted by 75% in early 2016 compared to the same period in 2015.

The Government has also set quarterly deployment caps for different technologies with the aim to keep overall FIT costs to £100 million per year by April 2019.

Further cuts are being proposed to Anaerobic Digestion (AD) plants from 2017, with the total elimination of tariff support for AD plants above 500 kW.

Renewable Obligation (RO) 

In December 2015, the Government announced that from April 2016, the RO will be closed for new PV projects of 5 MW capacity or below and to any expansions of already existing installation larger than 5 MW. The RO has also been closed for onshore wind installations from April 2016 – a year earlier than previously planned. The RO scheme will be totally closed for new applications as of 1st of April 2017.

Contract-for-Difference (CfD) 

The RO is being replaced by CfDs. The first CfD allocation round took place in October 2014, with results announced in February 2015. The second round was scheduled for October 2015 but was cancelled. Three further CfD rounds were announced in November 2015 to take place by 2020. A consultation was published in May 2016 on the terms of future CfD rounds and round 2 is now expected in late 2016.

Renewable Heat Incentive (RHI) 

The RHI is the world’s first Feed-in-Tariff for renewable heat, introduced in 2011 (non-domestic) and 2014 (domestic). The government announced in late 2015 that the RHI scheme would be extended to 2020/21. The budget is to increase from £430 million in 2015/16 to £1.15 billion in 2020/21.

A number of changes are being made to the RHI, including:

  • The heat demand that can be claimed for (which is deemed) is being reduced, thus cutting the amount of RHI that can be claimed by larger properties.
  • Solar thermal installations will no longer be eligible under the RHI from 2017.

Climate Change Levy (CCL) Since August 2015, renewable electricity generators have been no longer eligible for CCL exemption certificates which provided an additional income stream up to the value of the CCL (currently £5.54/MWh).

Summary

Recent policy changes have aimed to reduce the expenditure generated by the renewable energy support programmes and to create a policy framework that allows for better cost and capacity control, as well as to limit consumers’ electricity bills. Multiple policy changes have however created much uncertainty and have reduced the attractiveness of the UK for renewable energy investors.

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Highlighted records constitute key elements of renewable energy policy framework

Found: 47 results. (Tip: sort columns by clicking on the column header)
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TitleCountryYearPolicy StatusPolicy TypePolicy Target
Contract for Difference (CfD)United Kingdom2014 (October)In Force Economic Instruments>Fiscal/financial incentives>Feed-in tariffs/premiums Solar, Wind, Wind>Offshore, Wind>Onshore, Ocean, Ocean>Tidal, Ocean>Wave, Multiple RE Sources>CHP, Bioenergy>Biomass for power, Geothermal, Hydropower
Electricity Market Reform (EMR)United Kingdom2013 (April 1st)In Force Regulatory Instruments Multiple RE Sources, Multiple RE Sources>Power
Green DealUnited Kingdom2013Ended Economic Instruments>Fiscal/financial incentives>Grants and subsidies, Economic Instruments>Fiscal/financial incentives>Loans, Economic Instruments>Direct investment Solar>Solar photovoltaic, Multiple RE Sources, Multiple RE Sources>Heating, Multiple RE Sources>Power, Multiple RE Sources>Cooling, Multiple RE Sources>Renewable heat pumps , Solar Thermal
Renewable Heat Incentive (RHI) for domestic and non-domestic generatorsUnited Kingdom2011 (amended 2014, updated 2015)In Force Economic Instruments>Fiscal/financial incentives>Feed-in tariffs/premiums Solar Thermal, Bioenergy>Biomass for heat, Geothermal, Geothermal>Heat
Energy White Paper 2011United Kingdom2011Superseded Regulatory Instruments>Codes and standards, Economic Instruments>Fiscal/financial incentives>Feed-in tariffs/premiums, Policy Support>Institutional creation, Policy Support>Strategic planning, Policy Support Multiple RE Sources>All
Feed-in Tariffs for renewable electricity for PV and non-PV technologiesUnited Kingdom2010 (last updated 2015)In Force Economic Instruments>Fiscal/financial incentives>Feed-in tariffs/premiums Wind>Onshore, Bioenergy, Hydropower, Multiple RE Sources>CHP, Solar>Solar photovoltaic
National Renewable Energy Action Plan (NREAP)United Kingdom2010In Force Policy Support>Strategic planning, Policy Support Multiple RE Sources, Multiple RE Sources>All, Multiple RE Sources>CHP, Multiple RE Sources>Cooling, Multiple RE Sources>Heating, Multiple RE Sources>Power, Multiple RE Sources>Renewable heat pumps
Energy Act 2010United Kingdom2010Superseded Policy Support>Strategic planning
Low Carbon Transition PlanUnited Kingdom2009Ended Regulatory Instruments, Economic Instruments>Fiscal/financial incentives>Grants and subsidies, Policy Support, Policy Support>Institutional creation, Policy Support>Strategic planning, Economic Instruments>Direct investment, Research, Development and Deployment (RD&D) Wind, Bioenergy>Biofuels for transport, Bioenergy, Bioenergy>Biomass for heat, Bioenergy>Biomass for power, Multiple RE Sources, Multiple RE Sources>Heating, Multiple RE Sources>Power, Ocean
Renewable Energy Strategy 2009United Kingdom2009In Force Economic Instruments>Fiscal/financial incentives>Feed-in tariffs/premiums, Policy Support, Policy Support>Institutional creation, Policy Support>Strategic planning, Research, Development and Deployment (RD&D)>Research programme >Technology deployment and diffusion, Research, Development and Deployment (RD&D)>Research programme >Technology development, Regulatory Instruments Bioenergy, Bioenergy>Biofuels for transport, Bioenergy>Biomass for heat, Bioenergy>Biomass for power, Geothermal>Heat, Hydropower, Ocean>Tidal, Ocean>Wave, Solar, Wind, Wind>Offshore, Wind>Onshore
Low Carbon Industrial Strategy (LCIS)United Kingdom2009Ended Research, Development and Deployment (RD&D)>Research programme >Technology deployment and diffusion, Information and Education>Advice/Aid in Implementation, Information and Education>Information provision, Economic Instruments>Fiscal/financial incentives>Grants and subsidies, Economic Instruments>Fiscal/financial incentives>Loans, Policy Support, Policy Support>Strategic planning, Economic Instruments>Direct investment>Procurement rules, Economic Instruments>Direct investment>Infrastructure investments, Research, Development and Deployment (RD&D), Research, Development and Deployment (RD&D)>Demonstration project, Research, Development and Deployment (RD&D)>Research programme >Technology development Wind>Offshore, Bioenergy, Multiple RE Sources, Ocean>Tidal, Ocean>Wave
Renewable Transport Fuels Obligation (RTFO)United Kingdom2008 (last updated 2015)In Force Regulatory Instruments>Obligation schemes  Bioenergy>Biofuels for transport
Energy Act 2008United Kingdom2008Superseded Policy Support>Institutional creation, Policy Support Wind, Bioenergy, Geothermal, Multiple RE Sources, Multiple RE Sources>CHP, Multiple RE Sources>Heating, Multiple RE Sources>Power, Ocean, Solar
Climate Change Act 2008United Kingdom2008In Force Policy Support, Policy Support>Institutional creation, Policy Support>Strategic planning, Regulatory Instruments>Obligation schemes , Economic Instruments>Market-based instruments>GHG emissions trading Multiple RE Sources, Bioenergy>Biofuels for transport
Planning and Energy Act 2008United Kingdom2008In Force Regulatory Instruments Multiple RE Sources
Energy Technologies InstituteUnited Kingdom2007In Force Voluntary Approaches>Negotiated Agreements (Public-private sector), Policy Support, Policy Support>Institutional creation, Research, Development and Deployment (RD&D) Wind>Offshore, Multiple RE Sources, Ocean>Other, Ocean>Tidal, Ocean>Wave
Environmental Transformation Fund (ETF)United Kingdom2007Ended Economic Instruments>Fiscal/financial incentives>Grants and subsidies Multiple RE Sources>Power, Multiple RE Sources, Multiple RE Sources>All, Multiple RE Sources>CHP, Multiple RE Sources>Heating
Microgeneration Strategy 2006United Kingdom2006 Ended Economic Instruments>Fiscal/financial incentives>Grants and subsidies, Policy Support>Strategic planning, Research, Development and Deployment (RD&D)>Research programme >Technology development Multiple RE Sources>Power
Low Carbon Buildings ProgrammeUnited Kingdom2006Ended Research, Development and Deployment (RD&D), Information and Education>Information provision, Economic Instruments>Fiscal/financial incentives>Grants and subsidies Wind>Onshore, Bioenergy>Biomass for power, Geothermal>Heat, Hydropower, Multiple RE Sources>CHP, Solar>Solar photovoltaic, Solar Thermal
Climate Change and Sustainable Energy ActUnited Kingdom2006Ended Policy Support Wind>Onshore, Multiple RE Sources, Multiple RE Sources>Power
Scottish Biomass Support SchemeUnited Kingdom2006Superseded Economic Instruments>Fiscal/financial incentives>Grants and subsidies Multiple RE Sources>CHP, Bioenergy>Biomass for heat
Biomass Task Force ReportUnited Kingdom2005In Force Policy Support>Institutional creation, Research, Development and Deployment (RD&D)>Research programme , Policy Support>Strategic planning, Information and Education>Advice/Aid in Implementation, Information and Education>Information provision, Economic Instruments>Fiscal/financial incentives Bioenergy
Marine Research Development Fund (MRDF)United Kingdom2005Ended Research, Development and Deployment (RD&D)>Research programme >Technology deployment and diffusion, Research, Development and Deployment (RD&D)>Demonstration project Ocean>Wave, Ocean>Tidal
Research Councils Energy Programme (RCEP)United Kingdom2004In Force Research, Development and Deployment (RD&D)>Research programme >Technology deployment and diffusion, Research, Development and Deployment (RD&D), Research, Development and Deployment (RD&D)>Demonstration project, Research, Development and Deployment (RD&D)>Research programme , Research, Development and Deployment (RD&D)>Research programme >Technology development Multiple RE Sources>All, Multiple RE Sources
UK-US Partnership for Clean EnergyUnited Kingdom2004In Force Policy Support, Research, Development and Deployment (RD&D)
Bio-energy Infrastructure SchemeUnited Kingdom2004In Force Economic Instruments>Fiscal/financial incentives Bioenergy
Methane to Markets PartnershipUnited Kingdom2004In Force Policy Support Bioenergy>Biomass for power, Bioenergy>Biomass for heat
Funding for Using Willow as a Renewable Energy SourceUnited Kingdom2004Unknown Economic Instruments>Fiscal/financial incentives>Grants and subsidies Bioenergy>Biomass for power
Energy Act 2004United Kingdom2004In Force Regulatory Instruments Wind>Offshore, Ocean>Tidal, Ocean>Wave
Energy White Paper 2003United Kingdom2003Superseded Policy Support Multiple RE Sources, Multiple RE Sources>All
Renewable Energy Guarantees of Origin (REGOs)United Kingdom2003In Force Information and Education>Performance Label>Endorsement label, Regulatory Instruments>Monitoring, Regulatory Instruments>Codes and standards, Economic Instruments>Market-based instruments>GHG emissions trading Multiple RE Sources>All
Bio-energy Infrastructure SchemeUnited Kingdom2003Ended Economic Instruments>Fiscal/financial incentives>Grants and subsidies Bioenergy>Biomass for power
Industry Promotion and Information DevelopmentUnited Kingdom2003Unknown
Renewables Obligation (RO)United Kingdom2002 (last amended 2015)In Force Economic Instruments>Market-based instruments>Green certificates, Information and Education>Performance Label>Endorsement label, Economic Instruments>Fiscal/financial incentives, Policy Support>Strategic planning, Regulatory Instruments>Monitoring, Regulatory Instruments>Obligation schemes , Regulatory Instruments>Codes and standards Wind>Onshore, Bioenergy>Biomass for power, Geothermal>Power, Hydropower, Multiple RE Sources>All, Multiple RE Sources>Power, Ocean>Tidal, Ocean>Wave, Solar>Solar photovoltaic, Wind, Wind>Offshore
Preferential Tax Regimes for BiofuelsUnited Kingdom2002 (last amended 2008)In Force Economic Instruments>Fiscal/financial incentives>Tax relief Bioenergy>Biomass for heat
Biofuels Duty IncentiveUnited Kingdom2002In Force Economic Instruments>Fiscal/financial incentives>Tax relief Bioenergy>Biofuels for transport
Bio-energy Capital Grants SchemeUnited Kingdom2002In Force Economic Instruments>Fiscal/financial incentives>Grants and subsidies Bioenergy>Biomass for power, Bioenergy>Biomass for heat
Energy Technology ProgrammeUnited Kingdom2002Superseded Research, Development and Deployment (RD&D) Multiple RE Sources
Large-scale PV Demonstration ProjectUnited Kingdom2002Ended Regulatory Instruments>Monitoring, Economic Instruments>Fiscal/financial incentives>Grants and subsidies, Research, Development and Deployment (RD&D)>Demonstration project, Research, Development and Deployment (RD&D)>Research programme >Technology development, Regulatory Instruments>Auditing Solar>Solar photovoltaic
Offshore Wind Capital Grants SchemeUnited Kingdom2002Ended Economic Instruments>Fiscal/financial incentives>Grants and subsidies Wind>Offshore
Major PV Demonstration ProgrammeUnited Kingdom2002Ended Economic Instruments>Fiscal/financial incentives>Grants and subsidies Solar>Solar photovoltaic
Climate Change LevyUnited Kingdom2001 (last updated 2015)In Force Economic Instruments>Fiscal/financial incentives>Taxes, Regulatory Instruments Multiple RE Sources>Power
The Green Fuels ChallengeUnited Kingdom2001Ended Economic Instruments>Fiscal/financial incentives, Policy Support
Renewables Obligation PlanUnited Kingdom2000Superseded Regulatory Instruments>Codes and standards, Economic Instruments>Fiscal/financial incentives, Regulatory Instruments>Other mandatory requirements, Regulatory Instruments>Monitoring, Regulatory Instruments>Obligation schemes  Multiple RE Sources>All
Energy Crops Scheme - EnglandUnited Kingdom2000In Force Economic Instruments>Fiscal/financial incentives>Grants and subsidies Bioenergy>Biomass for power, Bioenergy>Biomass for heat
Scotland - Small business energy efficiency loansUnited Kingdom1999In Force Economic Instruments>Fiscal/financial incentives>Loans Multiple RE Sources
Non-Fossil Fuel ObligationUnited Kingdom1990Superseded Multiple RE Sources, Multiple RE Sources>Power, Multiple RE Sources>All

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