All the industry reaction to renewable energy subsidy plans

by Search Gate staff. Published Wed 04 Dec 2013 16:00, Last updated: 2013-12-04
Government support is welcomed by industry chiefs and campaign groups
Government support is welcomed by industry chiefs and campaign groups

Responding to today’s announcement from the Treasury on future levels of financial support for the renewable energy, industry leaders have reacted positively to the detail.

Niall Stuart, Chief Executive of Scottish Renewables, said: “There is a huge debate on the impact of energy bills and the renewables industry is focused on getting costs down as government seeks to reduce financial support to the sector.

“However, the sharper than expected cut to onshore wind will present a real challenge to developers, and could well mean that some projects don’t go ahead, slowing down progress towards our 2020 renewables and climate change targets.

“It will also present a serious challenge to many communities seeking to take forward their own developments, and means that only the most competitive and productive sites will proceed.

“It’s important we remember that onshore wind is the cheapest renewable electricity source that is being deployed at scale and is expected to play a major role in us meeting our ambitious 2020 target of generating the equivalent of 100% of our electricity from renewable sources.

“It’s also the technology that has driven the most investment into this country and has been vital in providing the necessary financial stepping stone investors need in order to move towards building offshore wind, wave and tidal farms.”

Mr Stuart highlighted that the change to offshore wind did not guarantee that projects around Scotland will go ahead: “We’re pleased that the Department of Energy and Climate Change has taken on board the evidence that offshore wind support cannot be cut as quickly as they had proposed.

“However, we are still at the earliest stages of developing offshore wind technology and scaling up the industry, and even if projects get consent there is no guarantee that schemes will proceed with the level of financial support outlined.”

Mr Stuart also welcomed changes to proposals for biomass and hydro and added: “Biomass can make an significant contribution to both our renewable electricity and renewable heat targets. The framework published today contains a number of positive changes, but there are still some important questions to be answered before we know that government has done enough to secure further expansion of the sector.

“There is still potential for more hydro in Scotland, and we are pleased that DECC has taken on board that the remaining sites are complex and often far from existing grid connections making it difficult to cut costs as previously proposed.”

He concluded by saying that more time was required to assess the overall impact of the changes:

“We now of course have to discuss and assess with our members exactly what this means for the future development of the renewable energy sector in Scotland. What is clear though is that government will only support the most competitive schemes and projects as we look to reduce costs and the level of support to the sector over years to come.”

Huub den Rooijen, Head of Offshore Wind at The Crown Estate: “This is an important step for the industry and a resounding signal of the Government’s commitment to ensuring offshore wind continues to make a substantial contribution to the UK’s energy mix. We will continue to work with all developers to get projects built.”

Chief executive of the Glasgow-based ORE Catapult, Andrew Jamieson said: "We welcome the Government's announcement of additional financial support for the development of offshore wind energy generation, in recognition of both the challenges that it faces and the opportunity that it brings.

"It is now imperative for industry and academia to work collaboratively with government to bring innovation to the market, to develop consistent standards and improve reliability, and to drive down the long-term cost of offshore renewable energy.

"That is how the UK will realise the huge potential economic, social and environmental benefits that this industry can provide."

And Friends of the Earth Energy Campaigner Simon Bullock described the announced as “welcome boost”.

He added: “The cost of producing clean energy from onshore wind and solar is becoming cheaper all the time, so cutting Government support for these technologies simply reflects their success.

“The extra support for offshore wind is a welcome boost and will lead to more jobs and investment.

“Onshore wind is already less expensive than nuclear, and solar will be cheaper by the time new reactors come on line.

“Ministers must now scrutinise the hand-outs given to support oil, gas and coal - George Osborne has given £2 billion to support dirty energy in the past year alone, and more is expected in the Autumn Statement.”

David Ferris, who leads the Energy & Utilities team at leading law firm Osborne Clarke, said: “At first glance, it would be easy to say ‘this is going to affect onshore wind and solar massively’. Some of the media this morning certainly seemed to go with that line.

“But the devil’s in the detail, and the information being released shows the changes are more in line with the accepted and continuing movement towards tapering off of subsidy levels as technology matures and costs reduce, reflecting the strength and maturity of the UK onshore renewables industry.

“If we’re not careful, we’ll lose sight of the really important detail here: this only affects future onshore solar and wind projects that are over 5MW and are not yet accredited. In short, there’s lots of great renewables projects that this simply doesn’t affect.”

RenewableUK’s Deputy Chief Executive Maf Smith said: “We welcome the fact that the Government has heeded the wind industry’s call for a more realistic level of financial support for offshore wind.

“It sends an important political signal that the Government recognises the need to back this sector, if we are to attract big wind turbine manufacturers to the UK to open up factories creating tens of thousands of jobs.

“The Chief Secretary to the Treasury Danny Alexander said today he wants at least 10 gigawatts of offshore wind installed by 2020, trebling current capacity. Industry can deliver this and more.

“Obviously any reduction in support for onshore wind is unwelcome, and the Government had promised that any drop would be based purely on economic evidence. Onshore wind is the most cost-effective form of renewable energy we have, so if we want to keep energy bills as low as possible, we need to ensure the level of support is right.

“Our challenge to Government is that it must work with industry to help us to reduce costs and support the right projects. The reduction means that some smaller projects such as communit- led schemes will be lost.

“If this cut has been made for political reasons rather than economic ones that would be a worry. All politicians need to understand that uncertainty spooks investors and it is the consumer who bears that cost. Voters support the development of on and offshore wind, so we now need a period of calm and consistency from Government.”

Greenpeace Policy Director Doug Parr said: “Today’s cuts to onshore wind and solar support schemes show how quickly the cost of clean energy technologies are falling. Onshore wind farms will power our homes and factories more cheaply than new nuclear stations, and the same is expected of solar.

"Given the increasing affordability of these renewable energy sources, it’s right Ministers should now put emphasis onto helping drive down the cost of offshore wind so that the UK can reap the rewards of new turbine factories and thousands of new jobs.”

Nick Molho, head of climate and energy policy at WWF-UK, said: "We support the idea that a successful subsidy regime is one that goes down in cost over time as technologies mature, but it's critical for investment stability that any revision to the level of support given to renewables is based on economic evidence.

"With respect to offshore wind, we welcome the Government's recognition that the sector needs early support to attract the levels of investment needed to cut its costs in the long term, make a significant contribution to our energy security and create promising growth opportunities. But going forward, what the offshore wind sector and the renewables industry as a whole need more than anything is long-term policy stability."

Brent Cheshire, DONG Energy UK Chairman, said: "We welcome the announcements from the Government on the FID-Enabling process and the strikes prices today. This is a concrete step in the right direction from the Government towards fulfilling the next phase of offshore wind development in the UK.

"The strong commitment to offshore wind demonstrated by the Government today gives us the confidence to move forward with our future pipeline of projects.

"DONG Energy has already committed to invest £4bn in the UK's offshore wind market and we are the world leader in this field. DONG Energy views the UK as a great place to invest and it is a growth market for us - our 1.6GW of installed offshore wind farms already power over 1 million homes."

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