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End of wind subsidy 'bad for bills'

Published 18/06/2015

The Tories promised ahead of the election to end new public subsidies for onshore wind farms
The Tories promised ahead of the election to end new public subsidies for onshore wind farms

Plans to end subsidies for new onshore wind farms will push up energy bills, the Government has been warned.

The move to close the existing subsidies payment scheme a year early for onshore wind projects could also face a legal challenge, as it drew criticism from industry, environmental groups and Scottish politicians.

The proposals to end the subsidies for wind under the "renewables obligation", through which subsidies are paid to renewable schemes, from April 1 2016 fulfils a Conservation election manifesto promise to curb wind farms in the countryside.

But the Government has been criticised for attacking the cheapest form of clean energy, and one which enjoys the support of 65% of people, while saying they want to cut carbon in the most cost-effective way.

It will push up energy bills, as support will have to go on more expensive forms of low-carbon energy to meet targets to tackle climate change, the industry and environmental groups warn.

The move also leaves thousands of jobs and millions of pounds of investment hanging in the balance, the industry said.

And it has prompted an outcry in Scotland, where the majority of the planned new wind farms will be constructed, with Scottish Government ministers warning the decision may be the subject of a judicial review.

Opponents of the move also warned cutting support for renewables set a bad example to other countries in the run-up to key international climate talks in Paris in December, when a global deal on reducing emissions is to be negotiated.

Under the plans, there will be a grace period offered to projects with planning consent, which could see up to 5.2 gigawatts (GW) of wind capacity, equal to hundreds or even thousands of wind turbines, being put up across the UK.

Energy Secretary Amber Rudd said: " We want to help technologies stand on their own two feet, not encourage a reliance of public subsidies.

"So we are driving forward our commitment to end new onshore wind subsidies and give local communities the final say over any new wind farms."

Ms Rudd said there were enough subsidised onshore wind schemes to meet renewable energy commitments.

But a European Commission progress report this week suggested the UK was set to miss its renewables targets for 2020.

Green Party leader Natalie Bennett said: "The Department of Energy and Climate Change's statement that 'we have enough onshore wind now' is laughable given how badly the UK is lagging behind other EU nations in our production of renewable energy.

"It is a sign of the skewed priorities of this Government that it is determined to deny support to the sustainable sources of energy we most need to develop, while continuing to heavily subsidise oil, gas and coal companies through tax breaks."

Industry body RenewableUK chief executive Maria McCaffery said the decision to prematurely end financial support for onshore wind sent a "chilling signal" not just to the renewables industry, but to all investors right across the UK's infrastructure sectors.

And she warned: " People's fuel bills will increase directly as a result of this Government's actions."

Shadow energy secretary Caroline Flint said: "Renewable energy investment was undermined by the mixed messages of David Cameron's last government and sadly that looks set to continue."

She said there were 1,000 projects whose investment plans could be affected by the latest "moving of the goalposts" and called on ministers to make clear exactly which schemes would be covered by the grace period.

Asked about the decision during First Minister's Questions at Holyrood in Edinburgh, Nicola Sturgeon said it undermined any Tory claims to be pro-business.

And she said: "As for climate-change targets, cutting support for low carbon energy is a terrible example to set to the rest of the world as we run up to the Paris talks, so I think this decision is utterly wrong-headed and wrong, and we will do everything in our power to get the UK Government to see sense and change it."

Juliet Davenport, chief executive of renewable electricity company Good Energy said: " At such an important time in international climate change negotiations, and just one day after people from around the country descended on Parliament to lobby MPs about climate change, it is very disappointing that the new Government is announcing plans to reduce support for the cheapest large-scale renewable energy - onshore wind.

"We believe the Government should be providing solid, stable support for renewable energy which helps tackle the threat of climate change and challenges the dominance of fossil fuels."

The renewables obligation will close fully in 2017 with a new system for subsidies for low carbon energy, known as "contracts for difference" being brought in.

Some onshore wind farms have already been awarded subsidies under the new programme, but it is thought unlikely new onshore schemes will receive payments, which are raised from consumer bills, through the contracts for difference.

Greenpeace UK energy and climate campaigner Daisy Sands said ministers were raising everyone's energy bills while backing expensive nuclear power and risky and unproven fracking.

"Even if this omnishambles of an energy policy survives the many legal challenges threatened against it, it will send a clear message to international investors that the UK Government is willing to wreck our power sector to please their most ideological backbenchers," she said.

The Department of Energy and Climate Change denied the the move would push up bills, saying that there was a cap on the cost of renewables to consumers, and including projects that had planning permission, the UK had as much onshore wind as predicted.

"If we'd allowed the renewables obligation to stay open longer, we could have ended up with more projects than we can afford - which would have led to either higher bills, or other renewable technologies losing out on support, " a spokesman said.

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