Question

To ask the Secretary of State for Energy and Climate Change, what assessment he has made of the options available to restructure the 2010 grant to the MOZES community energy cooperative in Nottingham in order to make it State Aid compliant.

The Department wrote to recipients of the Low Carbon Communities Challenge (LCCC) grant in 2010 when it became clear that the European Commission considered the feed-in tariff scheme (FIT) to be state aid, and therefore not permissible to be combined with the LCCC grant, as originally intended. Officials offered advice to the projects at that time.

The LCCC award letter made it clear that any income from FIT payments could only be spent on additional carbon reduction initiatives and therefore not to fund the maintenance costs of renewable energy systems installed under the LCCC grant. Some projects may have received grant funding for activities that are not associated with purchasing and installing renewable energy technologies. Such costs are not covered by the FIT and so can be supported by public grants without affecting eligibility for the FIT under the current rules. We will be issuing guidance that gives more clarity on this issue.

We will also be issuing guidance for new community groups covering: the treatment of different community ownership models under the FIT scheme; and reaching agreement with a commercial developer over sharing FIT payments.