Government rules could strangle green energy, according to a group of companies, some of whom have cancelled plans for renewable energy projects
Government regulations are creating barriers for firms wanting to generate their own energy from renewable resources, according to a group of companies. The group – some of whom have cancelled green energy plans – have set out their complaints in a letter to Joan Ruddock, the MP responsible for climate change action.
Renewable energy sources such as wind energy suffer from variable supply, making them suitable for companies to use on-site to top-up energy drawn from the grid, but the Government’s carbon reporting rules have destroyed the business case for doing this, says a group of forty businesses including BT, Microsoft and Sun Microssystems, whose letter is published by the Aldersgate Group, a coalition of environmental groups.
Sun Microsystems has suspended any further development work on solar and/or wind projects for on-site generation at its Guillemont Park Campus in Surrey, because of the rules. “This suspension will not be lifted until the current legislation is revised. It is not possible to make a viable business case for such projects under the current legislation which penalises companies who would like to invest in renewable energy generation.”
BT has already stated that its 250MW wind farm project is under threat because of the rules, which demand that any electricity that is subsidised using one government scheme (Renewable Oblication Certificates) cannot be classed as green in the mandatory carbon budgets that will be brought in by the Climate Change Act.
“The Government insists that end-users must assume that all electricity generated on-site contains the average carbon intensity for the national grid,” said the Aldersgate Group’s press release. “For its true carbon content to be reflected in company carbon reporting, the company must forgo the only relevant subsidy – Renewable Obligation Certificates (ROCs) – which in turn makes the vast majority of renewable energy investments financially unviable.”
“Businesses are questioning the rationale of investments in green energy if they must surrender either the subsidy or the green benefit,” said Peter Young, Chairman of the Aldersgate Group and author of the letter. “The letter today not only shows the magnitude of concern amongst leaders of British industry, but also puts forward a number of solutions that address legitimate Government concerns over double counting.”