04 November 2010

Too Much Sugar?

Tate & Lyle have just been to court in order to get the UK gov to review a decision as to how much enviro subsidy they should get for a biomass driven combined heat and power plant. (Tate & Lyle Industries Ltd & Anor, R. (On the application of) v Secretary of State for Energy and Climate Change & Anor [2010] EWHC 2752.)

The case is worth reading because it gives a lucid explanation of the way the Renewable Energy Market works in the UK; the case gives the appropriate regulations explaining about banding and gives their ultimate origin as being the EU.

Tate & Lyle were whinging 'cos the UK gov had made a mistake in determining what funding should be given and hence what renewal obligation certificate (ROC) rating should be given to their equipment. However, Tate & Lyle where whinging 'cos they did not benefit from this mistake.

They went to court and said that they hadn't been treated fairly because everyone else had been over subsidised by the governments error except for them.

They were given short shrift by the court on this issue.

However, if they were whining because they didn't get over subsidised, who did get over subsidised, and by how much?

Update, 5th November 2010

Closer reading of the case at paragraph 63,

"63 The review under Article 33(2) has started in October 2010. It is expected to last three years. Until it is completed, in 2013, the Secretary of State is in no position to know whether, as a result of the increase in wholesale electricity prices, other technologies are being over-subsidised under the present continuing allocation or not. It is not possible to know whether those technologies are in the same position as Tate & Lyle until such a review takes place. In respect of some, their costs may have been increased at a greater rate than revenue. In respect of others, their costs may have been reduced. But the statutory scheme cannot work at all if such features are to be constantly updated. The only occasion for updating is either a lengthy review lasting a number of years in respect of all technologies or the review contemplated by Article 33(3) in respect of one or more technologies once Article 33(3) is triggered."

Which means that on this particular issue, trying to find examples of over subsidy would be pointless until 2013.
Update 6th June 2011, Tate and Lyle Sugars Ltd v Secretary of State for Energy and Climate Change & Anor [2011] EWCA Civ 664 is a report of a failed appeal. It was obviously worth Tate and Lyle's while to pursue this claim.

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