Reshuffle: Green Energy Industry Fears Cutback Of Green Subsidies
Two key supporters of chancellor George Osborne were yesterday named as ministers in the Department for Energy and Climate Change (DECC) as part of the government’s reshuffle, prompting concerns of a squeeze on renewables investment.
Matthew Hancock replaces Michael Fallon as business and energy minister and Amber Rudd replaces energy minister Greg Barker, although she assumes the title of parliamentary under secretary of state.
“Osborne has raised concerns over the pace of the decarbonisation agenda and the resulting costs,” said Peter Atherton, analyst at Liberum, warning that the appointments suggest the Treasury “will tighten [its] over-sight of DECC.”
The Government introduced subsidies to support renewable energy, which is more expensive to generate as it uses newer technology.
But the Treasury has set a cap on how much green subsidies can cost consumers, as charges are fed through into their energy bills.
Industry critics argue that the current system is not working as the budget for renewable energy is shrinking fast, which could squeeze out new entrants to the market.
Hancock will look after shale gas, security of supply and oil and gas exploration, while Rudd will oversee energy-saving initiatives such as the Green Deal and carbon budgets.
DECC declined to comment.