Major changes for government renewable energy subsidies

 
Centrica Energy Lincs offshore wind farm off the Lincolnshire coast Subsidies for offshore windfarms are set to rise at the expense of onshore options

The government is to make big changes to the way it subsidises renewable energy, it has announced.

Ministers say they will cut support for onshore wind and solar energy, but give more backing to offshore wind power.

Chief Secretary to the Treasury Danny Alexander described the shift in subsidy as "a rebalancing" and said overall spending would not change.

But Labour said "chopping and changing" pricing was bad for business.

The price producers are promised for onshore wind power and solar energy will be cut from 2015, while the amount paid for offshore wind power will be increased.

The shift on wind energy comes ahead of Chancellor George Osborne's Autumn Statement, which he will deliver to MPs on Thursday.

Other pre-statement announcements include:

  • Details of the National Infrastructure Plan (NIP), with plans for £375bn of investment in energy, transport, communications, and water projects
  • The NIP also entails selling off the government's 40% stake in the Eurostar rail service as part of a plan to double the target for the sale of corporate and financial assets, from £10bn to £20bn, between 2014 and 2020
  • It features a further £50m for a redevelopment of the railway station at Gatwick Airport and financial support for the development of a new nuclear power station at Wylfa, north Wales
  • There is also confirmation that a UK guarantee has now been agreed for the £1bn Northern Line extension to Battersea in London
  • Road projects in the NIP include improvements to the A50 around Uttoxeter, in Staffordshire, and improvements to the A14 around the port of Felixstowe in Suffolk
  • The BBC has learned that Mr Osborne also plans to cap business rate rises in England and Wales next year at 2% instead of having them linked to inflation

UK wind energy statistics

  • There are 4,175 onshore turbines, with a total capacity of 6,772 megawatts
  • There are 1,075 offshore turbines, with a total capacity of 3,653 megawatts
  • Combined, these produce 25,278,340 megawatt hours of energy
  • This is enough to power 5,925,537 homes

Source: trade association RenewableUK

Sources from both coalition parties said there had been so much investment in onshore wind and solar energy that they no longer needed so much state support.

In contrast, they said, offshore wind sources still needed more subsidy to encourage long-term investment.

Mr Alexander denied suggestions the move was a response to Conservative MPs' unhappiness at wind farms being sited in their constituencies.

Both Conservative and Liberal Democrat sources said the decision made good political sense because they would have a policy that countered the threat from the UK Independence Party, which opposes all wind farms on principle.

Strike prices - the amount the government guarantees to pay per unit of electricity - are set substantially above the current value of energy, as a form of long-term subsidy to encourage firms to invest.

One Conservative source said he expected "quite a dramatic cut" in prices for onshore wind in 2015 and beyond. Another spoke of the "beginning of the end for mature renewables".

A wind farm at twilight

One source said: "We are in a very good place. If we didn't curtail onshore a bit, we would have so much onshore that the constraint wouldn't be financial but political. Ditto solar.

Analysis

The subsidy cut makes onshore wind cheaper than nuclear power this decade - and much cheaper in the long term.

But after hinting at big cuts in onshore turbines, ministers have made only a slight reduction - and this may not lead to many projects being cancelled.

The money that ministers shave off the onshore subsidy is transferred to offshore wind.

But offshore generation is much more expensive, so every pound shifted this way generates less electricity. And that in turn slightly increases the chances of blackouts in 2015.

The decisions on renewables are driven by conflicting priorities.

The government wants to disarm a campaign against onshore wind farms; encourage a world-leading offshore wind industry; gain as much energy as possible for the cheapest price; and meet UK and EU targets on clean power.

That's politics.

"So constraining solar and onshore makes good value-for-money sense, it lets us move quicker than expected to market forces, and enables us to ensure that the one renewable technology that can go to scale in the 2020s - offshore wind - gets the early support that an immature technology needs."

Energy Minister Michael Fallon said costs must be spread "much more fairly".

Downing Street denied that cuts in subsidies for onshore wind farms were in response to public concern that they were blighting the countryside.

The prime minister's official spokesman said: "The decision was based purely on the falling cost of onshore wind farms".

But, for Labour, shadow chief secretary to the Treasury Chris Leslie told BBC Radio 5 live: "They're just chopping and changing all the time - very bad for stable, long-term investment."

Gordon MacDougall, chief operating officer of renewable energy firm RES, added: "This announcement is a blow for investor confidence and will cut the deployment of onshore wind - the lowest-cost renewable energy technology in the UK's energy mix.

"By undermining onshore wind before it reaches maturity and substituting it with more expensive low-carbon energy, the cost to the consumer will increase."

* Mr Osborne will update MPs on the state of the economy from 11:15 GMT on Thursday, with live coverage and analysis of the Autumn Statement on the BBC news website, BBC TV and radio.

 

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  • rate this
    0

    Comment number 1030.

    1028.CURTAINS 2012

    If you are telling me these things did not happen, i will say you did not watch. Be wise, and just check i am lying. The models they made from years ago are all wrong, something else is at work here...but if you insist on eyes closed, ears closed, there is nothing anybody can teach you. Good luck anyway, it is right to question, but check. Die well friend

  • rate this
    +1

    Comment number 1029.

    1022.KING LEONIDAS
    Volcanoes erupt before Earthquakes, we have had 4+ this year in uk.


    +++

    In your count of UK earthquakes have you included the event reported on TV by the woman who felt it while driving near Balcombe?

  • rate this
    +1

    Comment number 1028.

    1027.KING LEONIDAS
    Just now
    1023.CURTAINS 2012

    We are one. You have to look at whole of earth, don't think just us, it's not a case of we are alright who cares. Look at Climate State on youtube if you follow scientists and such.


    +++

    The ability to create YouTube presentations is no proof of scientific accuracy.

  • rate this
    -1

    Comment number 1027.

    1023.CURTAINS 2012

    We are one. You have to look at whole of earth, don't think just us, it's not a case of we are alright who cares. Look at Climate State on youtube if you follow scientists and such. Too many signs to ignore, just look m8. Also add the channel Hawkkeyedavis has Signs of change. We all sit on plates, 2 islands have surfaced, some must sink. Rubix cube earth,look Vatican sphere

  • rate this
    +1

    Comment number 1026.

    1017.BrianW
    Add a small solar panel, a battery and a 12volt circuit to buildings and the need for commercial scale power generation would be slashed.

    +++

    If you want to make anything more than a tiny scratch in large scale power generation you would >100mm^2 cable for your 3000W kettle at 12V

  • rate this
    +1

    Comment number 1025.

    1017 - @BrianW.
    We don't distribute electricity at 240v, we simply use that in our houses. We distribute at 400,000v.

  • rate this
    +1

    Comment number 1024.

    The annual Chinese increase in carbon emissions every year dwarfs our total output - just the increase - the Chinese, the Indians and the Americans have made clear they will not reduce their emissions.

    Therefore to bankrupt our economy by twiddling with windmills in these circumstances is madness. We`ll just end up broke, cold and dark when the power fails.

  • rate this
    +1

    Comment number 1023.

    1022.KING LEONIDAS
    2 Minutes ago
    1019.CURTAINS 2012

    Not yet, lava tubes are being created as we spk, old ones crumbling hence earth noises, sink holes ect. They will tell you sandstone and such, judge for yourself. Volcanoes erupt before Earthquakes, we have had 4+ this year in uk.

    +++

    Where did the volcanoes erupt in UK this year?

  • rate this
    0

    Comment number 1022.

    1019.CURTAINS 2012

    Not yet, lava tubes are being created as we spk, old ones crumbling hence earth noises, sink holes ect. They will tell you sandstone and such, judge for yourself. Volcanoes erupt before Earthquakes, we have had 4+ this year in uk. Government messing themself, shifting gold to solid land mass. Be ready Spartans, get camping and renew old skills. Always have a bag ready

  • rate this
    +1

    Comment number 1021.

    The UK currently has one of the best renewable energy potentials in Europe yet the government is failing miserably in its statutory 'green' commitments and in its moral duties of environmental stewardship.

    Our government are selfish short-sighted twits with no conscience.

  • rate this
    +1

    Comment number 1020.

    @ 1017.BrianW

    Brian, don't forget to factor in the distribution losses.

    I'm off to bed.

  • rate this
    +1

    Comment number 1019.

    1016.KING LEONIDAS
    3 Minutes ago
    1011.CURTAINS 2012

    Have a look at pole movement in last 100 yrs, then look at where it's heading, now look at Hawkkeyedavis on youtube looking at last 2 years of devestation we hear little about.

    +++

    By how much has Earth's axis tilted?

  • rate this
    +1

    Comment number 1018.

    @1009. KING LEONIDAS,
    Storms are not getting worse!
    There is a dearth of storms, check the official data.

    If you want something easy to read see this:

    http://www.nydailynews.com/news/national/2013-hurricane-season-officially-mildest-article-1.1533443

    Only two hurricanes in the Atlantic this year.

    Were is global warming when you need it?

  • rate this
    0

    Comment number 1017.

    Why are we distributing electricity at 240volts only to transform it down to 12volts or so for all our gadgets?
    Add a small solar panel, a battery and a 12volt circuit to buildings and the need for commercial scale power generation would be slashed.

  • rate this
    0

    Comment number 1016.

    1011.CURTAINS 2012

    Have a look at pole movement in last 100 yrs, then look at where it's heading, now look at Hawkkeyedavis on youtube looking at last 2 years of devestation we hear little about. A wise man would look at flood myths. Why are previous civilisations under meters of mud. Eyes open, mind open, be ready. Information is being suppressed, don't be fooled.

  • rate this
    +1

    Comment number 1015.

    @ 1011.CURTAINS 2012
    @ 1009.KING LEONIDAS

    Appreciate that Leonidas.

    Well, the sooner China gets mining on the moon the better....

    We have no choice but to find another planet.

    And I was hoping to retire.....

  • rate this
    +1

    Comment number 1014.

    onshore turbines are the biggest con since 'experts' told us tobacco is good for you
    they hurt usbecause of AM and infrasound they kill wildlife bats birds views our homes tourism- and have virtually zilch effect on CO2-in fact they INCREASE CO2- hey but they make fortunes for wealthy landowners and foreign turbine companies

    they disintegrate in 10yrs and we pay turbine companies turn them OFF

  • rate this
    +2

    Comment number 1013.

    @998. Alaric the Visigoth
    You should read more!

    No one is obliged to put forward an alternate theory.
    The proposers of a theory 'the team' have staked their reputation to this theory, and unfortunately for them, it has been shown to be lacking on numerous points.
    @994, yes I accept the laws of physics, which ones do you think are broken?

    I accept warming, I do not accept that CAGW without proof

  • rate this
    +1

    Comment number 1012.

    1010.A Devastated Planet

    Anytime 301 ;-)

  • rate this
    +1

    Comment number 1011.

    1009.KING LEONIDAS
    14 Minutes ago
    1007.A Devastated Planet

    You could make it up, but the sad truth is it's real. Storms getting worse, and there is due a pole change

    +++


    What "pole change" is that? Whose fault is it?

 

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