The early closure of onshore wind subsidies will destroy investor confidence in renewable infrastructure projects and cost the UK economy millions, Savills Energy is warning.
Under the current subsidies scheme, the Renewables Obligation (RO) initiative, onshore wind projects which are built before March 2017 will automatically receive funding. However, this could be set to change. Since its re-election in May, the government has made its intentions clear to terminate new subsidies for onshore wind, with energy secretary Amber Rudd stating that the technology has little public support.
The minister is soon expected to announce the scheme’s closure a year early, in April 2016. Onshore wind farm developers will then need to bid for public subsidy under a new scheme, Contracts for Difference (CfD).
DECC has yet to confirm the date on which its policy decision relating to onshore wind subsidies will be announced.
Savills Energy is deeply concerned that a move to close RO will cost the industry millions, and is urging the government to allow developers to transition from RO to CfD as previously agreed to avoid irreversible industry damage.
A move towards early closure will also add hundreds of millions onto consumer bills, as the move will result in the substitution of more expensive technologies for onshore wind projects. It will work to destroy investor confidence in any infrastructure projects.
“The government’s pending move to terminate onshore wind subsidies is baffling to both industry and consumers,” said Tim Waterfield of Savills Energy. “Indeed, the government’s own surveys show that 65% of the British public support onshore wind.
“We urge the government to reconsider its untimely decision and to avoid acting in haste on an issue that may have an irreversible impact on investor confidence. Consultation with key bodies, such as RenewableUK, British Wind and Scottish Renewables, is absolutely key to determine the best outcome for the industry.”
