Renewable energy trade body RenewableUK has said it will launch legal challenges if the government cuts the existing subsidy scheme for onshore wind power, Out-Law.com has reported.
The Department of Energy & Climate Change (DECC) plans to close the Renewable Obligation (RO) subsidy scheme a year earlier than planned, sources have told The Guardian.
However, RenewableUK lawyer Marcus Trinick called for energy secretary Amber Rudd to reconsider the action or face legal challenges.
Writing in a separate Guardian article this week, Mr Trinick called on Rudd to consult with the trade body before acting and warned that proposed measures might represent state aid discrimination.
Deputy chief executive Maf Smith told The Guardian that the industry would fight the move, adding that it appeared to contradict the government’s pledge that cuts would only be to new, not existing, subsidies.
The RO scheme is due to be replaced next year by the Contracts for Difference (CfD) mechanism, one of the most significant parts of the government’s electricity market reform programme through which it aims to incentivise up to £110bn in energy investment over the next decade.
CfDs provide guaranteed payments to operators of approved renewable generation technology while enabling the system operator to claw back money when market prices are high.
In February, 27 projects were awarded CfDs worth over £315m after a competitive bidding round, during which developers of projects using more established electricity generation technologies were invited to bid for the lowest guaranteed price per megawatt hour supplied to the grid that they were able to accept.
According to the DECC, the low “strike prices” obtained from this process meant that the government was able to support an additional 55MW of generating capacity.