Energy minister rejects demands for higher offshore wind farm subsidies

September 23, 2013 by  
Filed under Green Energy News

Under the plans, wind farms that start running in 2014-15 would be offered
£155 for every megawatt-hour (MWh) of electricity generated over a 15-year
contract – about three times the market price.

This would fall to £135/MWh for projects starting up in 2018-19, which the CCC
said was a steeper cut “than the evidence suggests is achievable”. It
recommended a lesser reduction to a price nearer £145/MWh.

David Kennedy, chief executive of the CCC, said: “I have spoken to every major
investor and they are all concerned.”

But Mr Barker dismissed Mr Kennedy’s claim, insisting: “That’s not my
experience at all.” He said: “We are not in the business of overpaying.”

The CCC also warned that investors were spooked by government documents
appearing to show ministers had significantly scaled back their ambitions
for how much offshore wind was wanted in the long-term.

Ministers have previously suggested Britain could have between 11GW and 18GW
of offshore wind capacity installed by 2020, up from 3.3GW now. Yet
scenarios published recently by the government appear to suggest it now
envisages only between 8GW and 10GW by 2020.

The CCC said wind farm developers were nervous about making the investments in
research and the supply chain necessary to reduce costs. “Without a
commitment to ongoing investment in the 2020s, incentives for supply chain
investment and project development are weak, and commercialisation of
offshore wind is at risk,” it said.

But Mr Barker also dismissed this argument, insisting: “We have greater
visibility in terms of our renewables order-book and policy than any other
country in Europe. Of course companies would like absolute certainty rolling
into the never-ending future, but to be able to give that through to 2020 is
unprecedented anywhere else in Europe.”

Mr Barker will today co-host a clean energy finance roundtable in New York,
with Dr Sultan Al Jaber, chief executive of Masdar, Abu Dhabi’s renewable
energy investment company.

Masdar, which has a stake in the London Array, Britain’s largest offshore wind
farm, has signed a memorandum of understanding to invest up to £1bn in more
UK power plants.

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