The government’s confirmation of financial support levels for large scale onshore and offshore wind after 2015 has stirred up a mixed reaction from industry.
Whilst some have criticised reductions to subsidy for onshore wind as ‘pandering to nimbyism’, the less steep than planned reduction to offshore subsidy has been greeted as a welcome boost to the sector.
For more details of the government’s announcement, click here.
RenewableUK’s deputy chief executive, Maf Smith, said: “We welcome the fact that the government has heeded the wind industry’s call for a more realistic level of financial support for offshore wind. It sends an important political signal that the government recognises the need to back this sector, if we are to attract big wind turbine manufacturers to the UK to open up factories creating tens of thousands of jobs. The chief secretary to the treasury Danny Alexander said today he wants at least 10 gigawatts of offshore wind installed by 2020, trebling current capacity. Industry can deliver this and more.
“Obviously any reduction in support for onshore wind is unwelcome, and the government had promised that any drop would be based purely on economic evidence. Onshore wind is the most cost-effective form of renewable energy we have, so if we want to keep energy bills as low as possible, we need to ensure the level of support is right. Our challenge to government is that it must work with industry to help us to reduce costs and support the right projects. The reduction means that some smaller projects such as community-led schemes will be lost.“
Brent Cheshire, DONG Energy UK chairman said: “This is a concrete step in the right direction from the Government towards fulfilling the next phase of offshore wind development in the UK. The strong commitment to offshore wind demonstrated by the Government today gives us the confidence to move forward with our future pipeline of projects.”
Paul McCullagh, chief executive of UrbanWind, said: “The government has ham-fistedly and naively lumped all types of on-shore wind together and made the draconian move of cutting subsidies across the board. The government is pandering to the NIMBYs by cutting subsidies for onshore wind. This is a poorly thought-through, very disappointing and retrograde move.”
REA chief executive, Dr Nina Skorupska, said: “The spin in Westminster and the media today is disappointing but not surprising. 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. The important thing is that decisions are evidence-based, not purely political, and we need to see the methodology to assess that.”
STA chief executive, Paul Barwell, said: “The negative political rhetoric about solar farms is a shame given the announcements today show good support for solar after 2015. The strike prices clearly show this is a technology on track to compete with fossil fuel prices. This is fantastic news for the public as solar will deliver clean power at a very stable price, with no unexpected cost fluctuations. The changes in strike price announced today widen the gap between the cheapest and most expensive technologies, which is a concern as funds are limited.
“Developers still have the option of the Renewables Obligation until 2017, which DECC has pledged to keep stable to support investor confidence during the transition to EMR. All in all, the outlook remains positive. But it is frustrating that the strike prices don’t properly reflect real world costs – it looks as if on the back of the consultation they’ve simply taken off £5/MWh across the board. Certainly the cost evidence the STA submitted was much more nuanced than that. Perhaps DECC have sought to spare nuclear’s blushes by giving us a higher strike price than them, when we could have gone lower.”
Sarah Johnson, head of renewables at the National Skills Academy for Power, said: “We welcome the government’s recognition of the challenges our offshore wind industry faces, but it is disappointing to see the lack of commitment for onshore, which is an established technology with a track history that investors can rely on. Onshore should not be overlooked as a lack of support here could risk the development of the planned 4.5GW of power and the three million homes it could supply.
“Our figures show that almost 45,000 jobs could be created in offshore wind in the next ten years, but there could also be more than 37,000 created across onshore – government needs to support both to guarantee growth. We have seen fantastic investment from the UK Commission for Employment and Skills (UKCES) into our renewables initiatives, but more government commitment positively impact the economy and assist the UK in achieving its target of generating 15 per cent of power from renewable sources by 2020.”
Rupert Higgin, managing director of The Green Electrician Group, said: “The government needs to offer a clear and coherent energy strategy in order for investment and stability in the renewables sector. Currently the industry is being passed from pillar to post as it reacts to the piecemeal policies.
“The high, and increasing, cost of energy in the UK means that solar is still an important part of the country’s energy mix and as such should not be ignored. Businesses considering solar should act now if they are to benefit from the double digit returns it currently offers.”