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Spending Review D-Day for Green Industry

Date: 19 Oct 2010

Ahead of the release of the details of the UK Coalition Government’s spending review later this week, green group Friends of the Earth is warning that any cut to feed-in tariffs (FITs) could provoke a legal challenge.

Reports in the media today are hinting that cuts to feed-in tariffs of 10% could be on the cards as part of the Government’s Comprehensive Spending Review.

But Friends of the Earth says that the levels of FITs were set out by the previous government with a clear commitment that they would not be reviewed or reduced until 2013.

Any changes to this commitment could presage a legal challenge from local councils, community groups or small-scale energy producers that have invested in renewable energy generation.

“The Government has clearly set out tariff levels for the first three years of the scheme,” says Friends of the Earth campaign director Craig Bennett. “If Ministers try to cut agreed payments for green electricity generation they may find themselves in court.”

Friends of the Earth today sent a letter to Energy Minster Greg Barker warning that cuts to feed-in tariff levels could also destabilise the UK’s small-scale renewable electricity market just as it is starting to gain momentum.

Meanwhile, other reports indicate that Secretary of State for Energy Chris Huhne has managed to secure £1 billion in funds from the Treasury to support carbon capture and storage development.

Although the amount is around half of that requested by the Department of Energy and Climate Change, the investment had looked a likely candidate for being cut entirely.

The spending review also looks set to squeeze the amount allocated to the Green Investment Bank to around £2 billion. A further casualty could be the Government’s Warm Front programme, which provided grants to vulnerable households for insulation and other efficiency measures.