Special report: Is a 10 per cent cut in wind subsidies enough?
PUBLISHED: 13:38 26 July 2012 | UPDATED: 17:34 27 July 2012
Householders will be paying less towards onshore wind developments from next year. But is a 10pc cut in subsidies enough? ADAM GRETTON reports.
Energy secretary Ed Davey appeared to have appeased backbench Tories yesterday after announcing that subsidies for onshore wind farms were set to be cut by 10pc from next April.
The Liberal Democrat minister set out a number of changes to renewable energy subsidies, which the coalition government claimed would help boost the economy by more than £20bn over the next five years.
However, anti-turbine groups in Norfolk yesterday said that the reduction was not enough and the cuts to the sector should have been the 25pc suggested by some members of the Conservative party.
However, the energy secretary said the changes to subsidies for renewables, which also include reducing offshore wind payments and more than doubling support for tidal, stream and wave power, would boost clean electricity while curbing the cost to consumers.
It comes after more than 100 Conservative backbenchers, including several from East Anglia, wrote to the prime minister earlier this year demanding he “dramatically cut” the £400m in annual subsidies paid to onshore wind developers.
South Norfolk MP Richard Bacon, one of signatories of the letter, yesterday welcomed the announcement of the new banding for renewable technologies under its renewable obligation.
“Until recently, this debate has been far too one-sided and very little if any attention has been paid to the significant extra costs to consumers of wind energy,” he said.
“This reduction in the subsidy paid is good news. Although I would have personally liked to see a larger reduction, it is a step in the right direction. The bottom line is that if wind energy is as viable, effective and efficient as its exponents claim, then it should not need government support to flourish.”
The Department of Energy and Climate Change confirmed that subsidies, which are paid for from consumer energy bills, would be reduced by 10pc for onshore wind as planned from 2013, but would be reviewed again in 2014.
The subsidies for certain marine energy technologies would be doubled whilst the government said rates of support for offshore wind would reduce as the cost of the technology came down during the decade. There will also be no immediate reduction in support for large-scale solar projects.
However, Eric Kirby, joint chairman of the Tivetshall Action Group, which is opposing plans for three large scale turbines near Diss, said a 25pc cut in onshore wind subsidies would have been better.
“I do not think 10pc is enough and the Liberal Democrats have been lobbied by the industry and they can stand a 10pc cut,” he said. “Twenty-five percent would have been more damaging and the industry must be rubbing their hands at this announcement.”
Mr Davey added that the measures would boost the economy by £20bn to £25bn between 2013 and 2017.
He said: “Renewable energy will create a multi billion-pound boom for the British economy, driving growth and supporting jobs across the country. The support we’re setting out will unlock investment decisions, help ensure that rapid growth in renewable energy continues and show the key role of renewables for our energy security.”
“Because value for money is vital, we will bring forward more renewable electricity while reducing the impact on consumer bills between 2013 and 2015, saving £6 off household energy bills next year and £5 the year after.”
Bruce Hutt, director at TCI Renewables, which has plans for turbines at three sites in south Norfolk, said: “We broadly welcome the Government’s long-awaited announcement following the conclusion of the Renewables Obligation Banding Review. The decision to cut the levels of financial support for onshore wind is in line with industry expectations and based on the evidence of the review.
“The decision gives a degree of certainty for financiers, which is important when attracting inward investment at this difficult time. Not only will it help update our critical energy infrastructure but it will provide a much needed boost to an otherwise hard-pressed economy.
“In terms of our projects in Norfolk, it’s business as usual. As borne out in opinion polls this year, the majority of the public are supporters of wind farms. The need for renewable energy remains, be it for reasons of climate change, lower electricity bills or reducing our reliance on imported fossil fuels.”
The government also outlined its backing for natural gas, including £500m tax breaks for shallow water gas fields to boost investment in economically-marginal gas fields.
The government said gas would continue to play an important part in the energy mix beyond 2030, to complement “intermittent” renewables.
There will be a new band to support existing coal plant converting to sustainable biomass fuels.