Government announces 10pc cut in onshore wind subsidies

Onshore wind farm developers will receive a 10pc cut in their subsidies from next year, the coalition government announced today.

Energy Secretary Ed Davey 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.

The announcement from the Liberal Democrat minister comes after Conservative MPs within the coalition had been calling for a much bigger cut to the subsidies that companies receive for wind energy.

The Department of Energy and Climate Change confirmed that subsidies, which are paid for from consumer energy bills, would be reduced by 10pc as planned from 2013.

The decision to cut wind payouts and increase support for tidal, stream and wave power could prompt investment of between �20 billion and �25 billion in the economy between 2013 and 2017, the department claimed.

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The government said rates of support for offshore wind will reduce as the cost of the technology comes down during the decade.

Mr Davey said: 'Renewable energy will create a multi billion-pound boom for the British economy, driving growth and supporting jobs across the country.

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'The support we're setting out today 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.'

But today's announcement also set out the government's backing for gas, including �500 million 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.

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