UK Government confirms the end of subsidies for onshore wind

by Search Gate staff. Published Thu 08 Oct 2015 11:47, Last updated: 2015-10-08
UK brings down the curtain on onshore wind market
UK brings down the curtain on onshore wind market

The Government is pushing ahead with its pledge to end public subsidies for onshore wind farms, by closing the Renewables Obligation scheme across the UK from the beginning of next April.

In amendments to the Energy Bill the Government has set out the grace period criteria, which it claims should provide some certainty for investors. It estimates that around 2.9GW of onshore wind capacity will be eligible for the grace periods.

The projects that are eligible for the grace period will need to demonstrate either that they had planning consent as at 18 June; that they have successfully appealed a planning refusal made on or before 18 June; or that they have successfully appealed after not receiving a planning decision due by 18 June. They will also need to show that they had a grid connection and land rights in place.

Projects that have met all these criteria and can demonstrate that they have struggled to secure finance from lenders since 18 June will be allowed extra time but no longer than nine months.

In total, the Government claims the amount of onshore wind capacity that could be deployed by 2020 is still 12.3GW to ensure the nation meets its renewable energy commitments.

Energy Minister Lord Bourne said: “We have a long-term plan to keep the lights on and our homes warm, power the economy with cleaner energy, and keep bills as low as possible for hard-working families and businesses.

“To do this we will help technologies stand on their own two feet, not encourage a reliance on public subsidies. By bringing forward these amendments we are protecting bill payers whilst meeting our renewable energy commitments.”

Michael Rieley, Senior Policy Manager for Scottish Renewables, said: “While we need to assess the precise impact of the announcement, it is clear that government has sought to address some unintended consequences of the decision to close the RO, for example, giving more time to projects unable to access finance because of the uncertainty created by the closure.

“However, many of our members will be bitterly disappointed that ministers are not going to allow projects which have submitted planning applications to be given a grace period.”

He added: “It is still our position that the UK Government’s rationale for removing financial support for onshore wind was unjustified. It is a course of actions that will, according to their own assessments, save just 30p on annual consumer energy bills and increase the UK’s carbon emissions by 63 million tonnes.

“Renewables remain key to meeting our long term and legally binding climate change targets, and it is vital that the Government sets out a long term plan to support the growth of the industry as we approach the climate change talks in Paris in December.”

RenewableUK’s Deputy Chief Executive, Maf Smith, commented: “This announcement means that wind farm companies can now go ahead and fully invest in local wind farm projects. It’s good to see that Government has acknowledged the financial uncertainty caused by these changes and the additional time offered will help rebuild investor certainty.

"It’s important that industry works with Government and Parliament to ensure these amendments are incorporated and the Energy Bill gets on the statute books as soon as possible. It is only then that developers can deliver the level of new capacity the Government wants to see by 2020.

"While today’s announcement will help us reach targets in the short-term, we need to make sure that onshore wind remains part of a competitive energy market. Onshore wind is one of the cheapest forms of electricity and it makes long-term sense for consumers. We will work with Government to ensure the industry can help build the new energy infrastructure the UK desperately needs."

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