Reduced subsidies for onshore windfarms and solar power announced on Wednesday are "good news", according to a leading renewable energy trade body, because it shows the costs of the technologies are coming down.
The cuts set out by the energy secretary, Ed Davey, mean onshore windfarms will for the first time receive lower subsidies than future nuclear power stations.
However, wind industry sources said the cuts meant small, community-owned windfarms were likely to be cancelled, harming the government's own intention to overcome opposition to turbines in some places by giving local people a stake in the developments.
A small increase in the future subsidy for offshore windfarms was welcomed as significant by developers, though some criticised the government for lacking ambition for the technology in which the UK is a world leader.
"The spin in Westminster today is disappointing but not surprising," said Nina Skorupska, chief executive of the Renewable Energy Association. "But today is actually a good news day for renewable electricity and renewable heat.
The real reason that support for solar and onshore wind will go down is that they are leading the race for cost-competitiveness with fossil fuels. Government policy is working and bringing down costs."
However, a spokesman for another trade body, RenewableUK, said: "The cuts mean sadly that a lot of the more marginal windfarms, which means the smaller and community-based ones, will fall away.
Those are the very ones the government wanted to fly, so local communities could take ownership of their energy and to make onshore wind more politically acceptable."
He noted that onshore wind had already been cut by 10% in April and said the government had not presented any evidence that there had been further cost reductions since then.
A number of sources suggested the cut to onshore wind was the result of political pressure from scores of Conservative MPs and that this exacerbated uncertainty for investors.
Davey said: "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 stations and keep the lights on."
He said the announcements on Wednesday, which also covered more support for renewable heat and biomass, were also aimed at meeting the government's objectives on renewable energy, cutting carbon emissions and minimising the cost to consumers.
The subsidy changes cover the four-year period starting after the 2015 general election. Onshore wind is being cut by 5% a year, and solar by 4% for three years then 9%, while offshore wind remains unchanged apart from a 5% increase in 2018-19.
The small increase for offshore wind, and new details of contracts "do not look like a lot but the big developers who are our members are very pleased: it will mean that projects due to be built at that time can go ahead," said the RenewableUK spokesman.
Brent Cheshire, chairman of the offshore wind developer Dong Energy UK, said: "This gives us the confidence to move forward with our future pipeline of projects." Davey said 10GW of offshore wind capacity – enough to power about 6m homes – was achievable by 2020.
But this represents a sharp drop in ambition according to RenewableUK, who said the aim had been 40GW in 2010. Ministers also announced a preliminary deal towards government loan guarantees for a new nuclear power station that Horizon, a subsidiary of Hitachi, may build on Anglesey in the 2020s.
Keith Parker, chief executive of the Nuclear Industry Association, said: "This is excellent news. Nuclear power is a clean, reliable and affordable source of electricity.
Major infrastructure of this kind requires large upfront capital investment and government guarantees in financing these projects will help keep overall costs down to the benefit of the consumer."
But Greenpeace's Doug Parr said: "Government largesse with nuclear has now reached bizarre proportions. It is guaranteeing the Anglesey plant despite the project having no planning permission, no financing and no approved reactor design.
Meanwhile the sources of renewable power and energy efficiency that will provide cheaper power are being chopped and changed."
Simon Bullock of Friends of the Earth said cuts to onshore wind and solar power subsidies reflected their success. "But ministers must now scrutinise the handouts given to support oil, gas and coal," he said. "George Osborne has given £2bn to support dirty energy in the past year alone."
theguardian.com
The cuts set out by the energy secretary, Ed Davey, mean onshore windfarms will for the first time receive lower subsidies than future nuclear power stations.
However, wind industry sources said the cuts meant small, community-owned windfarms were likely to be cancelled, harming the government's own intention to overcome opposition to turbines in some places by giving local people a stake in the developments.
A small increase in the future subsidy for offshore windfarms was welcomed as significant by developers, though some criticised the government for lacking ambition for the technology in which the UK is a world leader.
"The spin in Westminster today is disappointing but not surprising," said Nina Skorupska, chief executive of the Renewable Energy Association. "But today is actually a good news day for renewable electricity and renewable heat.
The real reason that support for solar and onshore wind will go down is that they are leading the race for cost-competitiveness with fossil fuels. Government policy is working and bringing down costs."
However, a spokesman for another trade body, RenewableUK, said: "The cuts mean sadly that a lot of the more marginal windfarms, which means the smaller and community-based ones, will fall away.
Those are the very ones the government wanted to fly, so local communities could take ownership of their energy and to make onshore wind more politically acceptable."
He noted that onshore wind had already been cut by 10% in April and said the government had not presented any evidence that there had been further cost reductions since then.
A number of sources suggested the cut to onshore wind was the result of political pressure from scores of Conservative MPs and that this exacerbated uncertainty for investors.
Davey said: "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 stations and keep the lights on."
He said the announcements on Wednesday, which also covered more support for renewable heat and biomass, were also aimed at meeting the government's objectives on renewable energy, cutting carbon emissions and minimising the cost to consumers.
The subsidy changes cover the four-year period starting after the 2015 general election. Onshore wind is being cut by 5% a year, and solar by 4% for three years then 9%, while offshore wind remains unchanged apart from a 5% increase in 2018-19.
The small increase for offshore wind, and new details of contracts "do not look like a lot but the big developers who are our members are very pleased: it will mean that projects due to be built at that time can go ahead," said the RenewableUK spokesman.
Brent Cheshire, chairman of the offshore wind developer Dong Energy UK, said: "This gives us the confidence to move forward with our future pipeline of projects." Davey said 10GW of offshore wind capacity – enough to power about 6m homes – was achievable by 2020.
But this represents a sharp drop in ambition according to RenewableUK, who said the aim had been 40GW in 2010. Ministers also announced a preliminary deal towards government loan guarantees for a new nuclear power station that Horizon, a subsidiary of Hitachi, may build on Anglesey in the 2020s.
Keith Parker, chief executive of the Nuclear Industry Association, said: "This is excellent news. Nuclear power is a clean, reliable and affordable source of electricity.
Major infrastructure of this kind requires large upfront capital investment and government guarantees in financing these projects will help keep overall costs down to the benefit of the consumer."
But Greenpeace's Doug Parr said: "Government largesse with nuclear has now reached bizarre proportions. It is guaranteeing the Anglesey plant despite the project having no planning permission, no financing and no approved reactor design.
Meanwhile the sources of renewable power and energy efficiency that will provide cheaper power are being chopped and changed."
Simon Bullock of Friends of the Earth said cuts to onshore wind and solar power subsidies reflected their success. "But ministers must now scrutinise the handouts given to support oil, gas and coal," he said. "George Osborne has given £2bn to support dirty energy in the past year alone."
theguardian.com
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