Many onshore wind development prospects are likely to be abandoned in the light of two announcements in the last 48 hours – that the subsidy for onshore wind from the Renewables Obligation will be closed a year early in April 2016, and that local communities in England will have the final say over whether onshore wind projects go ahead.
Shirley Mathieson, Head of Renewables at UK top 20 Chartered Accountant Saffery Champness, says:
These two measures combined are likely to throw the sector into complete disarray. Many developers will have been working towards the 2017 deadline to ensure receipt of subsidy. Now that has been removed, although it is understood that there will be a period of grace for those projects that have received planning consent.
This change will involve the re-writing of budgets and forecasts for those who would have accrued for example rental income from planned developments, including communities, and equally those on the ground – farmers and landowners – who may also have a stake in such projects.
Some developments may already have spent in the region of £1 million on the process, and have now, in minutes and an unprecedented U turn, had the rug pulled from under them.
Likewise the move to make local communities in England the final arbiter over wind developments is bizarre when, for instance, their opinions with respect to other technologies – most notably fracking – will only be taken into account through the normal planning process. This might appear to work in favour of community wind projects, but it is unlikely that many of them will now be taken forward with the proposed subsidy cut unless they are already some way into development.
