Renewable energy has been subsidised in the UK for at least 25 years. However, the nature, scope and level of the subsidy has been subject to significant change over time. In recent years, due to a range of fiscal and political pressures on the government, various support schemes have been either scaled back or abandoned.
Government subsidies provide an incentive to invest in commercial activities which would otherwise be uneconomic. That is their point. So what happens if a business, having made those investments in the expectation of a subsidy, finds that it is then withdrawn with little or no warning? Does it have any legal right to a notice period, or compensation in lieu of one?
This was the question considered by the High Court in the recent case of Drax v HM Treasury, which has important implications for business planning in any industry which currently benefits from government financial support.