Onshore wind loses out in new subsidy reforms

 
Suzie Neuwirth

SUBSIDIES for onshore wind and solar energy projects are to be cut, while support for offshore wind will increase, as part of the UK government’s renewable energy reshuffle unveiled yesterday.

The guaranteed price – or so-called strike price – paid to companies for onshore wind will fall by £5 per megawatt hour (MWh) next year to £95, and by another £5 in 2017.

The price paid to companies for solar energy will also be cut.

But the strike price for offshore wind will stay flat at £155 per MWh until 2017-18, when it will be cut by £5 less than previously proposed.

Subsidies to support investment in renewable energy projects are paid for out of levies on customers’ bills.

“These reforms are a tweak rather than an overhaul,” Ian McCarlie, energy partner at Pinsent Masons, told City A.M. “A lack of clarity around regulations will impact investment decisions, so the government is heading in the right direction.”

There is currently over 20 gigawatts of renewables capacity operational in the UK, which the government hopes will double by 2020 as a result of the subsidies shake-up.

16 renewable projects are in the final stages of approval for state investment, the government said yesterday. Ecotricity, an onshore wind operator that owns one of the 16 projects, spoke out against the reduced subsidies.

“Every time the government chips away at support for onshore wind it makes more projects fall through,” said managing director Dale Vince.

“It makes no sense as we get twice as much energy from onshore wind as we do offshore wind.”