Is the government right to cut support for onshore wind projects?

An onshore wind farm

An onshore wind farm - Credit: PA

Additional investments of around £40 billion are expected in renewable electricity generation projects over the next few years, although subsidies to solar power and onshore wind farms will be cut.

Energy and Climate Change Secretary Ed Davey announced details of a package he said would deliver record levels of investment in green energy by 2020.

Campaigners said cuts to onshore wind and solar support schemes showed how quickly the cost of clean energy technologies was falling.

Chief Secretary to the Treasury Danny Alexander insisted onshore wind farms would continue to play 'a big role', and denied that reducing subsidies was a response to Tory opposition, saying state help for onshore wind and solar was being reduced 'slightly' in favour of offshore wind.

Rural wind farms have been a source of coalition tension, with many senior Conservatives staunchly opposed to the turbines, which Lib Dems say are needed to meet environmental objectives.

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The Department of Energy and Climate Change published updated contract terms and strike prices as well as wider reforms to the electricity market.

The current 20 gigawatts (GW) of renewables capacity could double by 2020, with almost 11GW of offshore and onshore wind with planning consent awaiting construction.

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Projects could contribute 30% of the new renewables generation needed by 2020, the department said.

Mr Davey stated: 'This package will deliver record levels of investment in green energy by 2020.

'Our reforms are succeeding in attracting investors from around the world so Britain can replace our ageing power station and keep the lights on.

'Investors are queuing up to express their interest in these contracts.

'This shows that we are providing the certainty they need, our reforms are working and we are delivering ahead of schedule and to plan.

'With 16 new major renewable projects progressing in our 'go early' stage, we are delivering ahead of schedule and are able to begin the move to the worlds first low carbon electricity market faster than expected.'

Greenpeace policy director Doug Parr said: 'Today's cuts to onshore wind and solar support schemes show how quickly the cost of clean energy technologies are falling.

'Onshore wind farms will power our homes and factories more cheaply than new nuclear stations, and the same is expected of solar.

'Given the increasing affordability of these renewable energy sources, it's right ministers should now put emphasis onto helping drive down the cost of offshore wind so that the UK can reap the rewards of new turbine factories and thousands of new jobs.'

Nick Molho, head of climate and energy policy at WWF-UK, said: 'We support the idea that a successful subsidy regime is one that goes down in cost over time as technologies mature, but it's critical for investment stability that any revision to the level of support given to renewables is based on economic evidence.'

Meanwhile, the Treasury has signed a co-operation agreement with Japanese firm Hitachi and its subsidiary Horizon to promote external financing for a new nuclear power station at Wylfa on Anglesey.

Mr Masaharu Hanyu, deputy chairman of Hitachi Europe Ltd and chief executive of the Nuclear Power Systems Business in Europe said: 'Our acquisition of Horizon represents a 100 year commitment to the UK.

'This co-operation agreement is a welcome demonstration of the UK Government's equal commitment to making a new generation of nuclear power stations a reality.'

Horizon chief operating officer Alan Raymant said: 'This is excellent news and another step forward for Wylfa Newydd.

'It will build confidence amongst our supply chain, future workforce, local communities, and importantly potential investors.

'New nuclear must be a part of the future energy mix given our long-term need for reliable low-carbon electricity which is also affordable for the consumer.'

Horizon was formed in 2009 to develop new nuclear power stations in the UK and was acquired by Hitachi last year.

A final investment decision is expected for Wylfa after licences, consents and permits are in place from 2018.

Horizon, which is developing nuclear power stations at Wylfa and at Oldbury in Gloucestershire, announced it had agreed 'important strategic contracts' with three UK-based companies for the provision of engineering and related technical services.

AMEC, Atkins and Cavendish Nuclear, and their supply chains, will be working with Horizon for the next three years on consultancy and technical design activities for Wylfa.

Mr Raymant, said: 'These contracts underline our aspiration to become a leading new nuclear utility company and demonstrate real momentum.

'Working with our new framework suppliers and their supply chains, I'm confident we will continue to progress our detailed plans as we prepare for our first formal public consultation next year.

'The signing of these contracts also highlights our commitment to working with UK suppliers where possible.'

Gareth Stace, head of climate and environment policy at EEF, the manufacturers' organisation, said: 'With energy bills already rising, industry will be disappointed that the reduction in subsidies for mature technologies such as onshore wind hasn't translated into a cut in the cost of the overall programme.

'In particular, the future path for offshore wind strike prices raises question about existing commitments to drive down their costs.

'However, industry will welcome the co-operation agreement on the Wylfa power plant as a further sign that nuclear power will play a key role in the low carbon investment programme.'

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