Green subsidies are often too high and don’t represent the best deal for consumers, a newly appointed minister has claimed.
Speaking ahead of his appointment as environment minister earlier this week, George Eustice, who formerly advised the government on green issues, said that the coalition government needs to replace the current system.
High subsidies are ‘passed on to energy bills’
Eustice told West Morning News that he felt current energy subsidies were hitting customers in the pocket.
“There is an argument that the level of subsidy paid for wind and solar is still too high and this is being passed on to electricity bills,” he told the newspaper.
“We need to replace the current subsidy system with a highly competitive ‘Dutch auction’ or tender process where renewable energy developers fight one another for the right to install new capacity at the cheapest possible price.”
Eustice said doing this would address the issue of varying costs and levels of efficiency between the different technologies.
Miliband’s proposals ‘not thought through’
His comments come at a time when it’s being reported that the government is looking to lower the green costs on energy bills as a way of countering the promises made by Labour leader Ed Miliband.
At the party’s conference, Miliband promised that prices for gas and electricity would be frozen for consumers for 20 months between 2015 and the start of 2017.
Eustice said of Labour’s plans: “Ed Miliband’s proposal was not thought through and is the wrong way to tackle a genuine problem. It could drive up prices in the short term and lead to energy companies gaming the system. The right response is to make the market more transparent and competitive.”
However, the initiative from the conservatives could be rejected by the Liberal Democrats, who are expected to oppose any move that would see the UK shift from its commitment to reducing carbon emissions.
At the current time, the Renewable Obligation guarantees subsidies based on the technology itself – be it offshore wind turbines, onshore wind farms, biomass plants, landfill gas sites or hydro power plants – rather than how effective an individual scheme is on a case-by-case basis.