Thursday, 02 July 2015 11:22

Subsidies for onshore wind discontinued – what does that mean for the industry?

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Last month the Department of Energy and Climate Change announced that the subsidies for onshore wind farms will run out a year earlier than expected – from 1 April 2016 they will no longer be eligible to subsidies. A grace period is granted to projects that already have planning permission.

This announcement seems oddly timed and irrational to many, given that onshore wind is currently the cheapest readily-available form of clean energy in the UK. BBC environment analyst Roger Harrabin quotes experts who have described the decision to scrap subsidies as “irrational and bizarre”. Scotland is particularly affected by this decision: “The decision by the UK government to end the Renewables Obligation next year is deeply regrettable and will have a disproportionate impact on Scotland, as around 70% of onshore wind projects in the UK planning system are here”, Scottish Minister for Business, Energy and Tourism and Member of the Scottish Parliament Fergus Ewing said.

The rationale on part of the UK government seems to be that there are enough projects either already up and running or in the pipeline to meet the country’s demand for renewable energy from onshore wind, according to Energy and Climate Change Secretary Amber Rudd.

Ewing criticised this stance, pointing out that the government now treats what previously were estimates for the share onshore wind energy would contribute to the entire renewable mix as targets: In the course of transforming our energy supply entirely to renewables, projections had been made of how much each form of renewable energy would contribute to the whole energy supply, and onshore wind energy happened to be estimated to be contributing 10%. Apparently, currently installed projects and those in the pipeline would be enough to reach this 10% mark – however, Ewing made clear that the figure of 10% had merely been an estimate and never been intended as a target.

He warned the UK government that their decision on onshore wind subsidies could be subject of a judicial review, and also cautioned that last month’s announcement may shake investor confidence in the wind energy market as a whole – including offshore wind – and possibly even the whole Renewables market, posing unforeseeable challenges to the entire energy market in the UK.

Ewing has now called an UK wind energy crisis summit for 9th July.

Last modified on Thursday, 02 July 2015 11:27
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