Wednesday 4 December 2013

Subsidy cuts to onshore wind revealed with crucial ‘strike prices’

Subsidy cuts to onshore wind revealed with crucial ‘strike prices’

The amount of cash available to help onshore wind farms and large solar projects in the UK will be cut under new government plans revealed today.

Ahead of the Chancellor’s Autumn Statement tomorrow, the Treasury published its Infrastructure Plan containing the crucial ‘strike prices’ which set how much subsidy renewable energy sources will receive up to 2019.

Wind developers who have been crying out for these numbers should finally get an idea of future returns under the new system to pay for low carbon energy, the Contracts for Difference (CfD).

Offshore wind is getting a touch more support for longer: as revealed in drafts this June, it will get £155 per megawatt in 2015-16, with a slight drop to £150 in 2017 but instead of dropping to £135 after 2017-18 it will stay at £140 for another year.

Onshore wind support will be set at £95 per megawatt from 2015 through to 2017, dropping to £90 the following two years up to 2019.

Large solar projects are set for the biggest plunge in support, going from £120 in 2015 to £100 per megawatt in 2018-19.

Speaking to the BBC, Chief Secretary to the Treasury Danny Alexander said: "The strike prices we're setting out today will unlock a big wave of investment, particularly in offshore renewables where we think that with the very positive plans we're setting out today we can get about 10 gigawatts or more of capacity in offshore wind between now and 2020.”

Mr Alexander added: "We're reducing slightly the subsidy that we provide to onshore wind and to these big solar schemes because we think that's the best way to get value for money."

Plants converted to biomass will hold steady at £105 over the four years.

Green groups generally reacted positively to the figures. Nick Molho, head of climate and energy policy at WWF-UK said: "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.”

He added a word of caution: “Going forward, what the offshore wind sector and the renewables industry as a whole need more than anything is long-term policy stability."

Greenpeace Policy Director Doug Parr said it is “right” ministers 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.”

Written by

Bruna Pinhoni

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