Thursday 18 June 2015

Labour Party slams onshore wind subsidy cuts

Labour Party slams onshore wind subsidy cuts

The Labour Party has slammed the UK Government for scrapping support for new onshore wind projects a year earlier than expected.

The government today announced the renewable energy source won’t be eligible for subsidies starting in April 2016.

Caroline Flint MP, Labour’s Shadow Energy Secretary said: “Renewable energy investment was undermined by the mixed messages of David Cameron’s last government and sadly that looks set to continue.

“Onshore wind is the cheapest and most developed form of clean energy and there are 1,000 projects whose investment plans could be affected by the latest moving of the goalposts. Ministers need to make clear which projects exactly the grace period will apply to.

“We already know the government is on course to miss a key renewables target and not only do these knee-jerk changes affect onshore wind, they dampen confidence across the renewable sector.”

Trade body Energy UK agreed withdrawing support for onshore wind projects earlier than planned "risks a negative reaction from investors providing finance for new, low carbon infrastructure".

Chief Executive Lawrence Slade said: "The indicated grace period is welcome but we will be scrutinising the details. Companies have already committed huge amounts of capital on projects and changes to the Renewable Obligation affect more than just onshore wind developments. Additionally, this could increase costs to customers as onshore wind can provide them with cheap, clean power. At a time when technology costs are coming down we shouldn't prematurely close the door to onshore wind."

Ben Warren, Energy Corporate Finance Leader at EY said the government needs to “clarify its strategy” for the UK’s future energy mix.

He added: “The rationale behind today’s announcement is that the UK has enough onshore wind capacity to help it meet its targets. This ignores both the fact that onshore wind can and already does provide cost effective power as well as the economic, social and environmental benefits that stem from it.

“If the objective is to secure clean and affordable energy then the government’s policy needs to accelerate the deployment of onshore wind and solar PV, the two technologies that have proved that they can be the cheapest and most rapidly deployable sources of clean energy.”

Matt Osborne, energy market expert from Inenco said the news could lead to “a surge of projects brought forward” before the subsidies end.

He added: “We should also expect to see an increased need for alternative sources such as solar and offshore wind to plug the capacity gap."

Written by

Bruna Pinhoni

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