UK Govt to replace Levy Control Framework with new set of controls

Image source: UK Government

UK Chancellor Philip Hammond delivered the Spring Budget 2017 on 8 March, according to which the Levy Control Framework (LCF) will be replaced with new set of controls later this year.

“The government recognises the need to limit costs to businesses and households as the UK decarbonises its energy supplies. The existing Levy Control Framework has helped to control the costs of low carbon subsidies in recent years, and will be replaced by a new set of controls. These will be set out later in the year,” the Spring Budget 2017 document reads.

In its response to the announcement, the Renewable Energy Association (REA) said that at present there is no clarification around the future of the LCF beyond 2020/21, and that a policy structure for new renewable electricity deployment is needed beyond this point in order for major projects to be planned.

The association also pointed out that this budget contained no new information about the UK government’s intentions regarding the future of the Carbon Price Floor.

James Court, Head of Policy and External Affairs at the REA said: “This budget has created new uncertainty around the levy control framework beyond 2021. The industry was expecting an announcement regarding the future budget levels and structure but this has been delayed and instead we face a new regime and no clarity on the proposed new ‘set of controls.’

“The decision over the Carbon Price Floor has yet again been kicked down the road and no details have been given for renewables and companies adversely affected by huge business rates increases.”

Commenting on the Chancellor’s announcement on the Levy Control Framework, RenewableUK’s Executive Director Emma Pinchbeck said: “We’re keen to work with Government on the new set of controls which are to replace the Levy Control Framework. Energy infrastructure takes time to build. Projects being thought about today will come on line in the 2020s, after the period covered by the LCF expires.

“We need to ensure that developers and investors in wind, wave and tidal energy projects have certainty so that projects can be built, economic returns can flow and consumers can benefit from the low cost of renewables”.

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