Props away
Jul 8, 2015
Bishop Hill in Climate: Parliament, Energy: grid, Energy: wind

So, rather remarkably, George Osborne has decided to knock away some of the props holding up the leaky old edifice that is the renewable energy industry. It seems that subsidy junkies will soon no longer be able to claim exemption from the climate change levy. Gratifyingly, the bigwigs at RenewableUK say that it is "a punitive measure for the clean energy sector" and if ever there was a sector that needed a bit of punishment it is green energy, which would have no existence at all were it not for the money extracted from poor consumers that they have persuaded politicians to hand over.

However, some of our green friends seem relieved that it wasn't worse. In particular the Levy Control Framework, which specifies an ever-rising amount that energy companies can extract from consumers in order to meet the requirements of government policy, is set to remain, although some reckon it could be reviewed later in the year.

The markets seem quite sure that this is going to hit the renewables sector quite hard, with Drax shares collapsing, but what it means for consumer prices is anyone's guess. Until the whole machinery of energy sector intervention is torn down, we will never know.

 

 

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