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Early closure of onshore wind subsidies may damage investor confidence in renewables, industry figures have warned. What does this mean for UK energy?
Since re-election in May the Government has made its intentions clear to stop new subsidies for onshore wind. Under the current scheme, the Renewables Obligation (RO) initiative, onshore wind projects that are built before March 2017 will automatically receive funding. But this could be set to change, with energy minister Amber Rudd appearing far from enthusiastic about new on-shore wind farms.
The minister is expected to soon announce the early closure of the scheme from 1 April 2016. Onshore wind farm developers will then need to bid for public subsidy under a new scheme, Contracts for difference (CfD).
The announcement is not a shock as it was part of the Conservative Party Manifesto, stating that onshore turbines, “often fail to win public support and are unable to provide the firm capacity that a stable energy system requires.”
The Department of Energy and Change have said there will be a grace period for projects that already have planning permission. But it is estimated that almost 3,000 wind turbines are awaiting planning permission with this announcement jeopardising these plans.
Estate agency Savills, which has been involved in on-shore wind farms, has warned that excluding new onshore wind farms from the subsidy scheme a year earlier than expected may cost the UK economy millions.
Wind turbines are one of the ways that the UK is diversifying its energy generation away from fossil fuels. There has been a striking increase in renewables generation in recent years, although some criticise onshore wind and solar generation as a blight on the rural landscape. There have also been complaints of noise from some nearby residents.
Whatever your thoughts on wind power, the current level of transparency of how business energy suppliers generate their electricity means that businesses can choose to support (or avoid) certain types of energy according to their preference.
To find out more – or simply to compare business energy and switch supplier in just 20 minutes – give us a call on 0330 0100 251 or fill in the form on the top right of the page.
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